CSN - Oct 2018 by ensembleiq

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

Order Up: INNOVATION Rutter’s is voted best of the best in this year’s Foodservice Innovators Awards.

OUR EXCLUSIVE TECHNOLOGY STUDY, PLUS HOW TO LOCALIZE YOUR PRODUCT ASSORTMENT OCTOBER 2018 CSNEWS.COM

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Winds of Change Still Blowin’ The c-store industry faces new challenges for the next decade “The televised news images of depositors standing outside their shuttered bank in Pasadena this summer was a nightmarish reminder of an earlier era when this country’s financial underpinnings shattered.” — Convenience Store News, Cover Story, October 2008 MY COVER STORY FOR THE OCTOBER 2008 ISSUE of Convenience Store News went on to describe how the nation was reeling from high energy costs, real wage stagnation, the real estate bust, a weakened currency, the mortgage financing crisis, shrinking employment and rising inflation.

Well-known gasoline retailers around the country were going out of business. Others were dealing with the negative impact of $5-per-gallon gasoline. On top of that, the industry was bracing for the arrival of a new small-format competitor from across the Atlantic — Britain’s Tesco Fresh & Easy stores. Entitled “The Winds of Change,” the article went on to interview top minds in the convenience store industry about the changes that were occurring in both the nation and the convenience store industry. Today, the c-store business is much healthier than it was a decade ago. The robust economy (household income is at an all-time high; unemployment is at historic lows) and lower fuel prices have helped. But many retailers also have embraced the changes observed by astute industry leaders who predicted that a “real transformation” is taking place.

Many of the changes we forecasted in 2008 occurred or are still going strong. Retailers are selling more private label goods, incorporating more products tailored to their local market and sourced locally, improving their foodservice menus, making acquisitions, and finding other payment methods to reduce debit and credit card transaction fees. Now, a different type of wind is blowing through the industry. Gas prices are creeping up, finding and keeping good employees is getting harder, and labor and other operating expenses are rising. New competitors continue to emerge, such as dollar stores selling cigarettes and fresh food, supermarkets upping their game in foodservice with “grocerant” concepts, and new small-format concepts from Walmart and Amazon. To meet the challenges of the next decade, retailers will focus mainly on technology solutions, such as: • Last mile delivery: getting the product to the customers’ homes; • Frictionless shopping: cashierless stores and making the shopping experience easier; and • Smart loyalty and rewards programs: they’ll know what you want, before you want it. A fundamental transformation occurred 10 years ago. I have a feeling another one is in the offing. For comments, please contact Don Longo, Editorial Director, at (201) 855-7606 or dlongo@ensembleiq.com.

EDITORIAL EXCELLENCE AWARDS (2013-2018)

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

EDITORIAL ADVISORY BOARD

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

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

2013 Jesse H. Neal National Business Journalism Award

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

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

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

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Jon Bratta Core-Mark International Inc.

Jack Lewis GPM Midwest

Rick Crawford Green Valley Grocery Edward Davidson ER Davidson & Associates (7-Eleven Inc., retired)

2016 Eddie Award Honorable Mention, Folio: magazine Business to Business, Retail, Full Issue, October 2015 Business to Business, Retail, Single/Series of Articles, August 2015

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

Vito Maurici McLane Co. Inc.

Finalist, Best Profile, August 2012

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

Brett Atherton Bolla Management

2014 Eddie Award Honorable Mention, Folio: magazine Business to Business, Retail, Full Issue, October 2013 Business to Business, Retail, Single Article, February 2013 2013 Eddie Award Honorable Mention, Folio: magazine Business to Business, Retail, Full Issue, October 2012

Jim Hachtel Eby-Brown Co. Ray Johnson Speedee Mart

Danielle Mattiussi Maverik Inc. Richard Mione GPM Southeast Jonathan Polonsky Plaid Pantries Inc. Greg Scriver Kwik Trip Inc. Roy Strasburger Strasburger Retail

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CONTENTS OCT 18

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162

44 FEATURES

DEPARTMENTS

COVER STORY

VIEWPOINT

STORE SPOTLIGHT

44 Order Up: Innovation Rutter’s is voted best of the best in this year’s Foodservice Innovators Awards.

4 Winds of Change Still Blowin’ The c-store industry faces new challenges for the next decade.

136 Fulfilling Immediate Needs Grocer Tom Thumb introduces its first Tom Thumb Express convenience store, highlighting fresh and convenient grab-and-go offers.

64 Charting a New Course FriendShip Food Stores’ new concept store is just one step of its transformational journey. 116 Investing in the Future Our 2018 Technology Study shows self-checkout and biometric payment are on convenience retailer agendas this year. 122 Visions Conceived & Achieved The winners of this year’s Convenience Store News Store Design Contest balance distinctive looks with improved functionality.

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10 CSNews Online TWIC TALK

36 New Products SMALL OPERATOR

40 Exploring the Cliché: Inspect What You Expect It really is not about the end result at all — it is about the process.

140 Sharon Kuncl, Eby-Brown The 2016 TWIC Woman of the Year advocates for working together to minimize barriers. GETTING TO THE CORE

162 Nutritionally Minded, Sort Of Convenience store shoppers show some interest in calorie/nutrition information.

an e d my ns m i w J o r b h N e w ! Jimmy s New! dean a h d f e hash browns f u stuffed t s ®

CONTENTS OCT 18

VO LU M E 54 N UMB ER 10 8550 W. Bryn Mawr Ave., Ste. 200, Chicago, IL 60631 (773) 992-4450 Fax: (773) 992-4455 www.csnews.com

Direct Mailing Address for Convenience Store News: 11-43 Raymond Plaza West, 16th floor, Newark, NJ 07102

CATEGORY MANAGEMENT

Vice President/Group Brand Director Paula Lashinsky (917) 446-4117 plashinsky@ensembleiq.com

FOODSERVICE

68 What’s Hot on C-store Menus? A new snack bar from 7-Eleven finds magic with consumers. FOODSERVICE

INDUSTRY ROUNDUP 11 TravelCenters of America Divesting Minit Mart Chain for $330M 14 Road Ranger Becomes the Latest to Get an International Owner 18 Fast Facts 20 Eye on Growth 22 Retailer Tidbits 24 Supplier Tidbits 26 Seen on Social Media 28 In the Public Eye 30 Competitive Watch 32 Legislative Corner

EDITORIAL Editorial Director (201) 855-7606

Don Longo dlongo@ensembleiq.com

Editor-in-Chief (201) 855-7608

Linda Lisanti llisanti@ensembleiq.com

Senior News Editor (201) 855-7618

Melissa Kress mkress@ensembleiq.com

70 Convenience & Foodservice: A Good Pairing The foodservice category continues to thrive in the channel, with more growth possible.

Associate Editor (201) 855-7619

Contributing Editor (303) 741-3377

Renée M. Covino reneek@aol.com

TOBACCO

Contributing Editor (201) 280-2614

Tammy Mastroberte tmastroberte@gmail.com

78 They’re Back Flavor bans are rearing their ugly head again in the legislative and regulatory arena. PACKAGED BEVERAGES

82 Riding the Beverage Wave After a disappointing 2017, the packaged beverages category is back to making a splash. ALCOHOLIC BEVERAGES

88 Pouring Over Decisions Younger consumers are changing the how and why of purchasing alcoholic beverages. WINE

HOW TO

BRAND MANAGEMENT

94 C-store Wine Grows Finer Convenience store retailers are upping their wine game in various ways.

Angela Hanson ahanson@ensembleiq.com

Associate Managing Editor (201) 855-7604

Danielle Romano dromano@ensembleiq.com

Assistant Editor (201) 855-7614

Chelsea Regan cregan@ensembleiq.com

ADVERTISING SALES & BUSINESS Associate Brand Director & Northeast Sales Manager (508) 385-2524

Rachel McGaffigan rmcgaffigan@ensembleiq.com

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

Ron Lowy rlowy@ensembleiq.com

Associate Publisher & Midwest Sales Manager Kelly Fischer (773) 992-4464 kfischer@ensembleiq.com Account Executive, Southeast (803) 315-0694

Cindy DeBerry cdeberry@ensembleiq.com

Account Executive & Classified Advertising Terry Kanganis (201) 855-7615 tkanganis@ensembleiq.com Classified Production Manager Mary Beth Medley (856) 809-0050 marybeth@marybethmedley.com EVENTS Vice President, Events (647) 557-5094 ext.1001

Michael Cronin mcronin@ensembleiq.com

AUDIENCE ENGAGEMENT Director of Audience Engagement Gail Reboletti (224) 632-8214 greboletti@ensembleiq.com Audience Engagement Manager (215) 301-0593

Shelly Patton spatton@ensembleiq.com

List Rental (847) 492-1350 ext.318

MeritDirect Elizabeth Jackson

Subscriber Services/Single-Copy Purchases (978) 671-0449 EnsembleIQ@e-circ.net PROJECT MANAGEMENT/PRODUCTION/ART

56 Localize Your Product Mix With local products becoming more important to consumers, c-stores that develop partnerships with local vendors can capitalize on this growing trend.

CANDY

100 Making Confectionery Shopping an Experience C-store category experts weigh in on the best merchandising and promotional strategies. SNACKS

104 Capitalizing on the Modern-Day ‘Healthy Halo’ From high protein to non-GMO, healthy snacking means many different things to consumers. SERVICES

112 Tunnel Vision As more c-store car washes trend toward tunnel service, here are four key questions to ask.

Vice President, Production (973) 358-4875 Creative Director (973) 607-1320

Kathryn Homenick khomenick@ensembleiq.com Colette Magliaro cmagliaro@ensembleiq.com

Custom Project Manager (224) 632-8244

Kathy Colwell kcolwell@ensembleiq.com

Custom Project Manager (973) 607-1368

Judi Lam jlam@ensembleiq.com

Advertising/Production Manager (773) 992-4418 Art Director (224) 632-8245

Ed Ward eward@ensembleiq.com Michael Escobedo mescobedo@ensembleiq.com

CORPORATE OFFICERS Executive Chairman Alan Glass Chief Executive Officer David Shanker Chief Operating Officer & Chief Financial Officer Rich Rivera Chief Brand Officer Korry Stagnito President, Enterprise Solutions Terese Herbig Chief Digital Officer Joel Hughes Chief Human Resources Officer Jennifer Turner Senior Vice President, Innovation Tanner Van Dusen CONVENIENCE STORE NEWS AFFILIATIONS Premier Trade Press Exhibitor

The contents of this publication may not be reproduced in whole or in part without the consent of the publisher. The publisher is not responsible for product claims and representations. Convenience Store News (ISSN 0194-8733; USPS 515-950) is published 12 times per year, monthly, by EnsembleIQ, 8550 W. Bryn Mawr Ave., Ste. 200, Chicago, IL 60631. Copyright © 2018 by EnsembleIQ. 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 Chicago, IL, and at additional mailing offices. POSTMASTER: Send address changes to Convenience Store News, P.O. Box 1842, Lowell, MA 01853.

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N E W L O O K. SAME CRUSH. Contact your RAI Trade Marketing Services representative or go to EngageTradePartners.com to learn more.

CIGARETTES

CSNEWS ONLINE

TOP 5 DAILY NEWS HEADLINES

Pilot Flying J Lays Off Employees as Part of Restructuring

The travel center operator gave notice to 50 employees at its Knoxville, Tenn., headquarters. The decision came after consulting firm Deloitte completed an analysis of the company’s business to identify resources that could be reallocated to streamline its operations.

First-Ever Shell Select Convenience Store Debuts in Louisville

Shell Select provides a consumer-focused retail convenience store experience to customers, featuring a broad range of high-quality, locally inspired, freshly prepared food and beverage offerings, all served in a relaxing and friendly environment, according to the company.

Casey’s General Stores Begins Checking Off Boxes of Value Creation Plan

Casey’s President and CEO Terry Handley told investors during the company’s first-quarter fiscal year 2019 earnings call on Sept. 11 that the retailer completed several key milestones of its value creation plan over the course of the last quarter. “Our multi-year, long-term plan is comprised of several key programs and value drivers, including a new fleet card program, price optimization and digital engagement programs, as well as a continued focus on controlling operating expenses and capital reallocation,” he explained.

7-Eleven Testing Vending Machine-Style Convenience Stores in South Korea

7-Eleven convenience stores in South Korea are going completely high-tech. The retailer started rolling out convenience stores with rows of vending machines, making it the first time a c-store operator has adopted a full self-service concept.

Ricker’s to Roll Out Frictionless Checkout Technology Chainwide

Ricker’s partnership with Skip is a hybrid of mobile pay and the Amazon Go concept. The mission is to provide a best-in-class convenience store experience, easy access to promotional deals, and enable customers to purchase in-store items at the pump or prior to arrival.

WEB SERIES: Disruptive Trends in Retail The way consumers shop continues to evolve and EnsembleIQ, parent company of Convenience Store News, continues to help retailers and consumer packaged goods companies keep up with the evolution. EnsembleIQ’s new webinar series, “2018’s Disruptive Trends in Retail,” offers a look at the nine trends radically influencing the purchase decisions of today’s shoppers. Presented as a 10-part series, “2018’s Disruptive Trends in Retail” leverages the expertise of EnsembleIQ’s research and editorial teams to deliver the key cultural drivers currently impacting the state of retail. 10 Convenience Store News C S N E W S . c o m

ONLINE EXCLUSIVE

The Eight Factors Prospective Employees Are Looking for Today The competition for high-quality employees is greater than ever for all retail channels, including convenience stores. Bruce Tulgan of RainMaker Thinking, a consulting firm in Whitneyville, Conn., maps out eight dream job factors that today’s employees are looking for when considering employment. “The No. 1 issue troubling business leaders today is the increasing difficulty in recruiting, motivating and retaining the best talent,” said Tulgan. “There is a talent shortage at every level, in every industry. The talent wars are back on and more heated than ever.” For more exclusive stories, visit the Special Features section of www.csnews.com.

MOST VIEWED NEW PRODUCT

Berry-A-Rita Ritas, the Anheuser-Busch line of flavored, sparkling margaritas, is targeting football fans this season with its limited-edition fall flavor, Berry-A-Rita. The mixed berry variety is available in a six-pack and it’s included in the new Party with RITAS variety pack that also features fan favorites Lime-A-Rita, Straw-BerRita and Mang-O-Rita. Ahead of the 2018 NFL season, Ritas launched a series of campaigns across TV, digital and social channels. The launch also incorporated a Ritas Football Pool and a NFL Tickets Sweepstakes. Anheuser-Busch St. Louis, Mo. (800) 342-5283 www.anheuser-busch.com

INDUSTRY ROUNDUP

TravelCenters of America Divesting Minit Mart Chain for $330M The deal with EG Group signals the company’s exit from the standalone c-store business By Melissa Kress TRAVELCENTERS OF AMERICA LLC (TA) is giving up operation of its standalone convenience stores. In a $330.8-million deal, the Westlake, Ohio-based company agreed to sell its Minit Mart chain to U.K.-based EG Group, which recently purchased The Kroger Co.’s c-store assets.

The portfolio includes 225 standalone c-stores and certain other related assets in nine states. There are five sites not included in the transaction. They are either part of a joint venture, under a multi-site lease, or are being converted to TA Express smallerformat travel centers. With this divestment, TravelCenters turns its focus to its core travel center business. “When the sale of this business is completed, TA will exit the standalone convenience store business, allowing us to increase our focus on our core travel center operation, which we believe is a business where we have many competitive advantages,” said CEO Andy Rebholz. The transaction is expected to close in the fourth quarter. The chief executive views the deal as a significant positive for TA. “Year to date in 2018, our travel centers accounted for approximately 93 percent of consolidated

site-level gross margin in excess of site-level operating expenses, while our convenience store segment represented approximately 6 percent of that measure,” Rebholz explained. “However, our leadership team and skilled support staff spent a disproportionate amount of time involved with our convenience stores. This transaction will mean more time and expertise devoted to opportunities within our core travel center operations — a business where we believe we have many competitive advantages, including an industryleading truck services business and one of the largest nationwide travel center networks,” he added. TravelCenters currently expects to use the net proceeds from the sale to reduce leverage and/or invest in travel center growth initiatives. EG Group came onto the U.S. convenience store scene with guns blazing earlier this year, reaching a deal to acquire Kroger’s convenience store portfolio for $2.15 billion. According to EG Group, which operates across eight countries in Europe and North America, Minit Mart’s operations “are highly complementary” to its existing operations in the United States. “We have a firm commitment to growing our presence in the [U.S.], the world’s largest convenience market, and are extremely pleased to have signed definitive transaction documents to acquire the Minit Mart network from TravelCenters. The Minit Mart portfolio will be a strong addition to our business,” said Mohsin Issa, founder and co-CEO of EG Group.

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Convenience Store News

INDUSTRY ROUNDUP

Road Ranger Becomes the Latest to Get an International Owner A subsidiary of Chile-based Quiñenco SA is buying the travel center chain for $289M

of Chile-based Quiñenco SA, is acquiring Road Ranger for $289 million.

ENEX, A SUBSIDIARY

Rockford, Ill.-based Road Ranger is the fourth largest travel center network in the United States. It has 38 travel centers located along interstates between Texas and the Midwest, with a presence in Illinois, Iowa, Indiana, Missouri, Texas and Wisconsin. In addition to a fuel offering, the travel centers feature the Road Ranger convenience store banner and quick-service restaurants including

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INDUSTRY ROUNDUP

Subway, Church’s Chicken, Chester’s, Cinnabon, Dickie’s Barbecue Pit, McDonald’s and Burger King. The acquisition, which is expected to close in the coming months, will mark Enex’s entry into the U.S. convenience channel and its first move outside of its home country. “We are pleased that a market as challenging as the U.S. is the country in which Enex begins its internationalization. It represents a significant opportunity to continue growing in our retail offer, in a market where 60 percent of the margin comes from complementary services and 40 percent from the fuel,” said Enex General Manager Nicolás Correa. “Road Ranger has significant growth potential in the number of stores and maturation of its current network of travel centers, with presence in two of the three states with the highest concentration of cargo traffic by trucks in the U.S.,” Correa added. “This leaves us very well positioned to capitalize on the

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trend of strong growth in demand for this mode of transport in that country, which has grown 6.7 percent in the last year.” Enex was founded in June 2011 as a licensee of Shell in Chile. Over the last five years, it has built a network of 454 service stations. “This transaction not only represents an important step in the development of Enex, but also is consistent with the internationalization strategy that Quiñenco has been promoting in recent years,” said Francisco Pérez Mackenna, general manager of Quiñenco and president of Enex. “We define ourselves as a business group open to the world to discover new horizons, contributing to the progress of all the countries where we are present. We are proud of the entrance of Enex to the market of the United States, whose economy shows signs of accelerated growth,” he added.

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INDUSTRY ROUNDUP

FAST FACTS

Smaller stores account for 25 percent of fastmoving consumer goods (FMCG) sales and 70 percent of FMCG shopping trips. — Nielsen Retail Measurement Services

MATCHA

The national gas price average could fall to less than $2.70 this fall season — 25 cents cheaper than May’s $2.97 average, this year’s recorded high.

Four international tea trends are expected to drive growth in the U.S. tea market from $8 billion in 2017 to $10 billion by 2022: matcha tea, morning tea, sencha tea and cold-pressed tea. — Packaged Facts, U.S. Beverage Market Outlook 2018

— AAA Fall Gas Price Forecast

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INDUSTRY ROUNDUP

Eye on Growth

Petroleum Marketing Group is selling five convenience store/gas station locations in the Chesapeake, Va., area. Of the sites, three are company-operated stores, one is a dealeroperated store, and one is closed. Through its Parkland USA subsidiary, Parkland Fuel Corp. is acquiring North Dakota-based Missouri Valley Petroleum Inc. (MVP). MVP operates three bulk plant terminals co-located with cardlocks, and owns and operates six convenience stores. Northern Tier Retail LLC, an Andeavor subsidiary, bought two Minnesota retail sites from Alimentation CoucheTard Inc. The sale was part of

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the Federal Trade Commission’s approval of Couche-Tard’s acquisition of Holiday Cos. SMO Inc., a subsidiary of The Wills Group Inc., acquired the retail and fuel distribution assets of Tevis Oil Inc. The deal consists of Jiffy Mart stores, as well The stores, located primarily in northern as commission agent and Maryland and southern Pennsylvania, will continue to fly the Jiffy Mart banner. lessee dealer sites. Ricker’s opened a new flagship convenience store in New Palestine, Ind., on Aug. 28. The store, which features floor-to-ceiling glass windows, a Ricker’s Kitchen and a sit-down dining area, is the first of many that will follow this design.

Enmarket expanded its diesel fuel business with the acquisition of Joker Joe’s Truck Stop in Hardeeville, S.C. This move extends the retailer’s reach in a key market from Savannah, Ga., to Charleston, S.C.

Stewart’s Shops Corp. opened four new convenience stores in the first 10 days of August. The new locations are in Glen Falls, Middletown, Berlin and Troy, N.Y.

Weigel’s is expanding in the Chattanooga, Tenn., market. Currently, it has at least four locations under its control and the retailer is searching for more sites.

Island Energy Services plans to expand its retail operations by opening a new Texaco-branded gas station in Kapolei, Hawaii, in early 2019. Additional new locations throughout Hawaii will follow. Offen Petroleum inked a binding agreement to acquire the business assets of Overland Petroleum, a fellow independent fuel distributor. The transaction is expected to close in the third quarter.

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Convenience Store News

INDUSTRY ROUNDUP

Retailer Tidbits

7-Eleven Inc. expanded delivery via the 7NOW mobile app to New York City. The service is also available in Washington, D.C. and the Dallas-Fort Worth area. Stewart’s Shops Corp. launched the Scoop Club, a new rewards program for its ice cream fans. Members who buy 10 items from the ice cream counter at Stewart’s Shops will receive their 11th item for free. Wawa Inc. introduced a third limited-time, specialty grade coffee in its Wawa Reserve line. Wawa Reserve Peru Amazonas joined the coffee lineup in September.

Pilot Flying J is teaming up with J.B. Hunt Transport Inc. to create a rewards program for Carrier 360 by J.B. Hunt. Drivers can receive fuel discounts and Pilot myRewards points by purchasing diesel fuel at participating sites with the J.B. Hunt 360 fuel card.

Other rewards include discounts on SiriusXM truck radios and complimentary SiriusXM subscriptions.

Quality Dairy is teaming up with Vroom Delivery to offer delivery service to its customers in Michigan. The service, which includes daily specials, is available within an eight-mile radius of the retailer’s 500 E. Saginaw St. location in Lansing. Rutter’s expanded its Fresh & Local initiative with the addition of seasonal fruits and vegetables to its grab-and-go and menu offerings. The assortment includes watermelon, blueberries, heirloom cherry tomatoes and sweet corn.

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INDUSTRY ROUNDUP

Supplier Tidbits

The Hershey Co. is buying Pirate Brands from B&G Foods Inc. for $420 million. The deal includes the Pirate’s Booty, Smart Puffs and Original Tings brands.

Tyson Foods Inc. is acquiring Keystone Foods for $2.16 billion in cash. The purchase from Marfrig Global The deal includes six processing plants and an innovation center. Foods is Tyson’s latest investment in its value-added protein capabilities. Campbell Soup Co. is selling its Campbell International and Campbell Fresh businesses. After a strategic review, the company has decided to turn its focus to two distinct businesses: Campbell Snacks and Campbell Meals and Beverages. The Coca-Cola Co. is acquiring U.K.-based Costa Limited. The deal is valued at $5.1 billion and will give Coca-Cola a strong coffee platform across parts of Europe, Asia Pacific, the Middle East and Africa.

PepsiCo Inc. inked an agreement to acquire sparkling water company SodaStream International Ltd. The transaction, valued at $3.2 billion, is expected to close by January. Core-Mark Holding Co. will relocate its headquarters to Texas in 2019. The company said the Dallas-Fort Worth area offers a better operating cost, lower taxes and a central location for its operations. Mondelez International’s Nabisco brand redesigned the box for its Barnum’s Animals crackers. The new look has the animals roaming free instead of in cages.

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INDUSTRY ROUNDUP

Seen on Social Media

Ricker’s

Rutter’s

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York, Pa.

We are proud to finally announce that the doors are open to our newest store located in New Palestine right off of US-52 (6073 US-52 New Palestine, IN). Come visit us and check out our new look — including Ricker’s Kitchen, our own brand of made-to-order food options and a sit-down dining area. We can’t wait to see you there!

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FriendShip Stores Fremont, Ohio We are a couple days away from your chance to win $10,000! Purchase your wristbands at any FriendShip store in advance for $20. Also available the day of event at the venue for $25.

Want to add some local cider tastings to your evenings and weekends? Then come on out to the Rutter’s in Mechanicsburg on Saturday, October 27 from 5:00 PM until 7:00 PM. We will be sampling local Wyndridge Ciders. Need some food to pair with your cider? Rutter’s will have delicious food samples to go with your cider samples during the tasting!

INDUSTRY ROUNDUP

In the Public Eye

Alimentation Couche-Tard Inc.

Casey’s General Stores Inc.

In the United States, Alimentation Couche-Tard saw an increase in same-store revenue of 4.2 percent during the first quarter of its fiscal year 2019. On the forecourt, the company’s same-store road transportation fuel volumes increased by 0.6 percent in the U.S. They declined by 0.1 percent in Europe and 3.3 percent in Canada. Also during the quarter, the Circle K Tobacco Club saw an increase in the number of unique users enrolled in the program — now pushing almost 4 million — as well as the quantity of offers delivered. Additionally, Couche-Tard rebranded roughly 300 former CST Brands Corner Stores to the Circle K banner as the synergies related to the acquisition reached approximately $189 million.

Total revenue in Casey’s first quarter of fiscal year 2019 was up 23.6 percent to $2.6 billion, primarily due to rising retail fuel prices and an increase in its number of stores in operation. During the quarter, the retailer converted an additional 592 stores to biodiesel and 78 stores to premium or diesel fuel. By the end of the second quarter of FY2019, it plans to add one of these products to 344 more locations. Its increased fuel focus led to a higher average fuel margin of 20.5 cents per gallon for the quarter and a 13.1-percent increase in gross profit dollars from the fuel category. Total sales in the grocery and other merchandise category were up nearly 8 percent to $644.8 million in the quarter; same-store sales were up 3.2 percent.

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Competitive Watch

Amazon Inc. unwrapped a new Amazon Go store in downtown Seattle, its second in the city. This location marked the company’s first expansion of the Amazon Go cashierless convenience store concept outside its corporate campus. Standard Cognition opened Standard Market, a cashierless store in San Francisco. The site will test the company’s technology for scale, as well as for new features. The Kroger Co. announced that it will phase out single-use plastic bags and transition to reusable bags across its banners by 2025. The initiative will begin with the QFC banner in the Pacific Northwest.

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

Starbucks committed to design, build and operate 10,000 “Greener Stores” by 2025. Over the next year, it will develop an accredited program to audit all existing companyoperated stores in the United States and Canada against the green framework criteria. Walmart is partnering with crowdsourcing platform Spark Delivery to expand its grocery delivery service with a last-mile delivery program. The pilot uses an in-house platform that enables drivers The pilot launched in Nashville, to sign up for Tenn., and New Orleans. time slots, access order details, and get navigation assistance.

INDUSTRY ROUNDUP

Legislative Corner FDA Conducts Massive Crackdown on E-Cigarette Sales The agency issued more than 1,300 warning letters and fines to retailers ELECTRONIC CIGARETTES AND VAPOR PRODUCTS continue to be under the Food and

Drug Administration’s (FDA) microscope. The agency conducted a massive enforcement initiative this summer. As a result, the agency issued more than 1,300 warning letters and fines to retailers who illegally sold e-cigarette and vapor products to minors during “a nationwide, undercover blitz” of retail stores and online sites in July and August. In the wake of this “historic” inspection effort, FDA Commissioner Scott Gottlieb signaled that the agency intends to take new and significant steps to address the challenge of youth use of electronic cigarettes — and may re-examine its stand on flavors.

During the recent enforcement initiative from June through August, the FDA found the vast majority of the violations were for the illegal sale of five e-cigarette products — VUSE (British American Tobacco), blu (Imperial Brands subsidiary Fontem Ventures), JUUL, MarkTen XL (Altria Group Inc. subsidiary Nu Mark LLC) and Logic. These five brands currently comprise more than 97 percent of the U.S. market for e-cigarettes, according to the agency. Based on these results, the FDA issued letters to the manufacturers of these five brands asking each company to submit within 60 days plans describing how they will address youth access to and use of their products.

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NEW PRODUCTS

1. BeON Energems Convenience Valet entered into a new distribution partnership with BeON Energems, a brand of portable, dark chocolate energy bites. BeON Energems are caffeinated and low-calorie, with only 16 calories per piece. One serving (three bites) equals the same caffeine content as a cup of coffee, according to the maker. Three varieties are available: Dark Chocolate, Dark Chocolate Mint and Dark Chocolate Berry. More flavors are expected to launch in 2019. BeON Energems come in six-count pouches that are designed to be pegged or clip-stripped, but can also be merchandised at checkout or on-shelf in a branded 12-count caddy. The suggested retail price is $2.99 to $3.49. Convenience Valet Glendale Heights, Ill. (800) 351-2000 cvalet.com

2. Rich’s Gluten-Free 3. V8+Hydrate Pizza Crusts V8+Hydrate is a new plantRich’s Foodservice is expanding its convenience channel portfolio to include three clean-label, 10-inch, gluten-free pizza crusts. The crusts come in three varieties: Seasoned Cauliflower, Broccoli Cheddar and Traditional Gluten-Free. Rich’s gluten-alternative pizza crusts contain no artificial flavors, colors or high fructose corn syrup. With a shelf life of 270 days, they’re ideal not only for pizza, but also for sandwiches and dips, the company noted. They’re all freezer-to-oven and packaged in smaller pack sizes. Both the plantbased Seasoned Cauliflower crust and the Broccoli Cheddar crust weigh 5.2 ounces and come 24 per case. The Traditional Gluten-Free crust is 8.6 ounces and available 20 per case. Rich’s Foodservice Buffalo, N.Y. (800) 356-7094 richsfoodservice.com

based hydration beverage line that harnesses the natural goodness of sweet potato juice. Available in three varieties — Strawberry Cucumber, Coconut Watermelon and Orange Grapefruit — the line taps into the naturally occurring electrolytes and glucose of the sweet potato and blends it with water, creating an isotonic beverage that quickly replenishes fluids and nutrients, according to the maker. With only 45 calories in each 8-ounce can, V8+Hydrate delivers one full serving of vegetables, contains no artificial sweeteners, and is non-GMO, gluten free and vegan friendly. The suggested retail price is $4.99 for a six-pack. Campbell Soup Co. Camden, N.J. (800) 257-8443 campbellsoupcompany.com

4. Pop-Tarts Splitz Kellogg’s new Pop-Tarts Splitz feature two different fillings side by side within each tart — with sprinkled frosting on one half and drizzled icing on the other. Pop-Tarts Splitz are currently available in two flavor pairings: Frosted Strawberry & Drizzled Cheesecake and Frosted Brownie Batter & Drizzled Sugar Cookie. The all-day snacks come in 72-count cases. Kellogg Co. Battle Creek, Mich. (800) 962-1413 kelloggs.com

5. Leap Nicotine-Salts-Based Vapor System E-Alternative Solutions is expanding its portfolio of closed-system vaping products with Leap, a nicotine-salts-based vapor system brand. Leap features a sophisticated design, more powerful battery and higher capacity e-liquid pods than the leading competitor, according to the company. The Leap Vapor with Nicotine Salts franchise includes both rechargeable and disposable models, each offering a range of e-liquid flavors and three nicotine levels. The rechargeable system, The Leap Device, is offered in two kits, with and without a 1.5-milliliter e-liquid pod. Leap Pods come in eight flavors. The disposable product, Leap Go, comes in six flavors. E-Alternative Solutions Darien, Conn. (800) 843-3731 ealternativesolutions.com 36 Convenience Store News C S N E W S . c o m

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6. Milkadamia Milks & Creamers Milkadamia is a new nonGMO, gluten- and soy-free brand of macadamia nut milks and creamers made with sustainably farmed nuts. Milkadamia uses raw, never-roasted macadamia nuts for a smooth and easy flavor. Milkadamia currently offers Original, Unsweetened and Unsweetened Vanilla milks in both shelf-stable and chilled options, as well as the Latte Da barista blend. In July, Milkadamia also launched a line of creamers in Vanilla, Unsweetened Vanilla and Macadamia Fudge flavors. The products are dairy free, gluten free, vegan and free from cholesterol. Milkadamia Burr Ridge, Ill. (630) 861-2105 hello@milkadamia.com milkadamia.com

7. Orbit Freeze Mint Orbit recently unveiled its first intense mint flavor of gum, Orbit Freeze Mint. Expanding upon the brand’s mint offerings, Orbit Freeze Mint gum is packed with intense arctic freshness and an icy-cool flavor, leaving the consumer’s mouth feeling clean, according to the brand. The launch of Orbit Freeze Mint marks the brand’s first product innovation since introducing Orbit White in 2016. Orbit Freeze Mint will roll out to retailers nationwide in singles packs (suggested retail price of $1.09 to $1.59) and 3.58ounce multipacks (SRP of $2.59 to $3.39). Mars Wrigley Confectionery Hackettstown, N.J. (800) 627-7852 mars.com

8. Peanut Butter Chocolate Ripple Cakebites Cakebites introduces its newest variety: Peanut Butter Chocolate Ripple. The product features peanut butter cake, peanut butter cream and chocolate cake enrobed in a smooth peanut butter coating and rippled with chocolate drizzle. Peanut Butter Chocolate Ripple Cakebites improve upon a classic flavor combination and bring it to the next level of portability, according to the company. The Cakebites are available in a 12-count display, four-count family pack, as well as a new smaller 90-count gravity feed display. Peanut Butter Chocolate Ripple Cakebites will be available nationwide in November. Cookies United Islip, N.Y. (631) 581-4000 cakebites.com

9. Dos Equis Mexican Pale Ale Dos Equis Mexican Pale Ale resembles a traditional Pale Ale, but with a Mexican twist that is fuller bodied and delivers a subtle kick of heat. This sessionable Mexican Pale Ale will be available on draught nationally at sports bars and Buffalo Wild Wings through early November. This distribution is Phase 1 of an anticipated broader national launch in 2019. Distribution and marketing efforts will be focused on the core Dos Equis markets of Texas, New Mexico, Nevada and California. The launch will be supported with social media, national PR, key influencers, events, tastings, wait staff training on Mexican Pale Ale differentiation, account menus and signage. Heineken USA White Plains, N.Y. (914) 681-4100 heinekenusa.com

10. BIG AZ KICK AZ Croissant Sandwich Tyson Foods expands its convenience channel offering with the BIG AZ KICK AZ Croissant Sandwich. Designed for heat-seekers, this croissant sandwich packs bold, spicy flavor, according to the company. The BIG AZ KICK AZ Croissant Sandwich is made with Sriracha glazed sausage, ham, scrambled egg, and Swiss and pepper jack cheeses on a buttery croissant. Each sandwich is hand-assembled and wrapped in packaging that allows consumers to see exactly what’s inside. Tyson Foods Springdale, Ariz. (800) 233-6332 tysonfoodservice@casupport.com tysonconvenience.com 38 Convenience Store News C S N E W S . c o m

C-

Exploring the Cliché: Inspect What You Expect

SMALL OPERATOR

RE RES

It really is not about the end result at all — it is about the process WE ALL RECOGNIZE AN OLD CLICHÉ when

we see it — words of wisdom that have been uttered hundreds, if not thousands, of times. You can probably finish the sentence after spotting just a couple of words.

By Roy Strasburger, President, Strasburger Retail

However, the fact that something is a cliché does not mean it is wrong. All it means is that it has been repeated and become conventional wisdom. The reason the phrase is repeated is because it is usually based on a true assumption or fact. Let’s take one of the Management Hall of Fame’s most famous phrases: “You must inspect what you expect.” First of all, what does this even mean? It tells us that if you are expecting a certain outcome, you need to check to make sure the outcome actually happened. For example, if you expect a clean store, you need to go around the store and give it a hard look to make sure it

has been done. The bottom line is that you can’t take anything for granted. For a retail operator, though, I feel the phrase is a bit more complex than that. It is not just about walking around to make sure something has been done. It really is not about the end result at all — it is about the process. You must create an objective, communicate that objective, make sure the team attempting the objective has the right tools, and provide support and guidance to the team to keep them on track. Then, you can inspect the result (and reward the team for the accomplishment). That sounds like a fairly complicated task structure for just keeping a store clean (or anything else), but I believe it is essential to making sure the goals are achieved. Let’s break the process down into simpler building blocks:

Create an Objective What is it that you want done? Is it obtainable? Does your team have the right skills to accomplish it? Is it a long-term or shortterm goal? Will the task need to be maintained or repeated? Once you have answers to these questions, you can move on to the next step in the process. For example, our objective is to have a clean store. We need to be very specific as to what the objective entails. In our case, we will focus just on the retail sales space (cleaning behind the counter and the store room will be future challenges). When we say clean, we mean floors mopped; shelves and products dusted, fronted and faced; windows and cooler doors cleaned; the foodservice and beverage bar wiped down and orderly; and all of the trash receptacles empty. We have a well-trained crew working the midnight shift who can achieve the objective. It needs to be done quickly (shortterm) and we expect it to be done continuously (maintained). We now know where we are going. We just have to figure out how to get there. We need a map.

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

KF638 | Â© John Middleton Co. 2018 | For trade purposes only.

SMALL OPERATOR

Communicate the Objective We need to tell the person(s) responsible what it is that we want done and we need to be very specific about it. We can’t just say “clean the store” because that leaves too much open to interpretation and sets the performer up for failure. We need to say exactly what we want (provide them with the list in the paragraph above), make sure they understand what we want, tell them when it needs to be done, and get confirmation it will be done by that date. If we go through this step completely, then we have a person who is responsible for the objective and, more importantly, knows they are responsible.

Provide the Right Tools Does our team have access to the right tools to do this work? For our objective, the tools are pretty straightforward: a broom, a mop, a bucket, cleaning disinfectant, water, paper towels and dust cleaning cloth. (Side note: It is better to use products like Swiffer because it collects and retains the dust, rather than a traditional feather duster that only moves the dust from one place to another). Pretty easy. However, there is one tool that always needs to be provided and is often overlooked — time. We need to make sure the team attacking the objective has sufficient time to do the work, or else it will not get done and everyone may lose.

If there is not sufficient time in the current schedule, providing time can be as easy as assigning a part-time person to gain some extra hours or adding another full-time person to free up time on a regular basis. Regardless, time is the most important tool we have and it needs to be available.

Provide Support & Guidance When we know that work is being done, we need to visit the store to make sure the person doing it is headed in the right direction. If someone is headed off on the wrong path, it is essential to intervene as soon as possible to get them back on track. Prompt action will save time and reduce frustration. In our example, checking in on the night person doing the work will help ensure you get what you are looking for. In addition, if your encounter is positive and supportive (even if he is cleaning the front-side walk rather than the store floor), it will be appreciated as positive training input.

Inspect the Result After you’ve assured that the person is headed in the right direction, it will be time to show up on the agreed-upon completion date to inspect the work. If you have done everything correctly (see how I put the responsibility on you rather than the person doing the work), then you should be inspecting what you expected to see. If what you see isn’t what you expected, you need to review the above steps and see where you either missed something or did not communicate something fully. I hope it goes without saying that if you are seeing the result you wanted, then you need to provide positive feedback to the person doing the work and let that person’s supervisor know of his or her successful completion. Doing something well needs positive reinforcement for it to feel like an accomplishment. It will also encourage and motivate the person to continue to do the work needed to keep the store clean all the time. One of the exciting parts of this process is that you can scale it up to larger and more complex projects. Starting with the fulfillment of simple tasks can lead to the completion of more complicated ones. You can build on the successes and try to take them to the next level, but you must remember to follow all of the steps of the process. As you can see, the old cliché still lives! In this case, the important thing is to be involved, communicate well and reinforce good behavior. CSN Roy Strasburger is president of Strasburger Retail (previously Convenience Management Services Inc.), a privately held retail consulting, operations and management provider serving the small-format retail industry nationwide. Strasburger Retail operates retail locations for companies that don’t have the desire, expertise or infrastructure to operate them. Learn more at strasburgerretail.com. Editor’s note: The opinions expressed in this article are the author’s and do not necessarily reflect the views of Convenience Store News.

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

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

COVER STORY

Order Up: Innovation Rutter’s is voted best of the best in this year’s Foodservice Innovators Awards By Don Longo

SINCE THE CONVENIENCE STORE NEWS Foodservice

Innovators Awards program began seven years ago, Rutter’s, the MidAtlantic regional chain of 71 foodservice-forward convenience stores, has found itself in the winners’ circle four times. In 2012, the inaugural year of the awards, York, Pa.-based Rutter’s was named Foodservice Innovator of the Year. In 2013, it won Prepared Foods Innovator of the Year and in 2015, Rutter’s nabbed the award for Best New Foodservice Offering. This year, for the second time, Rutter’s has been chosen as the Foodservice Innovator of the Year and tops the list of six best-inclass convenience foodservice retailers selected as honorees in the 2018 Foodservice Innovators Awards program. Chosen by the Convenience Store News Foodservice Advisory Council — a panel of foodservice experts from the retailer, supplier, wholesaler, research and consulting fields — 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. “Rutter’s is constantly in the news with new menu offerings that are distinctive vs. the competition,” said one of the experts on the Foodservice Advisory Council. “They are also very focused on their customers’ needs.”

OCT

20 1 8

Convenience Store News

COVER STORY

Rutter’s new 10,500-square-foot Duncannon, Pa., store features the chain’s largest kitchen.

The Makings of a Winner On-trend, fresh, local and friendly define the Rutter’s brand. Among the many accomplishments the retailer is being recognized for this year are: • Expanding its food menu to include two local favorites: Pork Belly and Pepperoni “Roni” Rolls. Pork Belly is available as an additional topping for such items as burgers, sandwiches and mac & cheese, in addition to serving as a standalone sandwich, sub or wrap. It was initially available exclusively at Rutter’s for two months. “Roni” Rolls are soft, Italian dough stuffed with pepperoni and mozzarella cheese, and topped with cheese. Like Pork Belly, it is supplied by a local manufacturer — defined as being located within a 100-mile radius of Rutter’s corporate office, or made in the state of Pennsylvania. • Earlier this year, Rutter’s further expanded its extensive food menu by offering customers more than 25 new seafood options. Items include fried shrimp tacos, tavern battered cod sandwiches, crab cake sliders, fried scallops, a fried clams basket meal, crab and roasted corn chowder, and single, double and triple tavern battered cod Route 30 sandwiches. This offering represents the most seafood options of any convenience store operator in central Pennsylvania, according to the company. • Rutter’s has been investing in local, fresh and healthier product procurement. In January, the retailer promoted Cheri Booth to the new position of fresh and local category manager, reporting to Ryan Krebs, director of foodservice.

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

Booth oversees all aspects of local, fresh procurement including produce, seasonal fruits and vegetables, foodservice, snacks, beverages, beer and wine. At the time of Booth’s promotion, Krebs stated, “Consumers increasingly want more fresh, local and clean label products. We think that deserves a dedicated person to make sure we are providing our customers with the highest-quality local products possible.” Most recently, Rutter’s expanded its fresh and local initiative with the addition of seasonal fruits and vegetables to its grab-and-go cold cases and fresh restaurant menu offerings. An assortment — which could include watermelon, blueberries, heirloom cherry tomatoes, sweet corn, and yellow and green squash, depending on the time of year — is available in the grab-and-go case in the center of its stores. The watermelon, blueberries and tomatoes come in ready-to-eat packaging for a quick and healthy snack. In addition, the new fresh and local ingredients are used in Rutter’s in-store restaurants, such as sliced and chopped sweet onions, sliced green peppers and mushrooms — all of which are grown in Rutter’s home state of Pennsylvania. Rutter’s will change its fresh and local selection of ingredients as the growing seasons change. A “Local” icon on the retailer’s electronic buildyour-own ordering kiosks identifies available offerings. The c-store chain’s President and CEO Scott Hartman (left) accepts Rutter’s award from Convenience Store News Editorial Director Don Longo.

COVER STORY

loaded Route 66 Burger; a hearty but definitely not spicy chicken pot pie; as well as newer offerings made with spicy ingredients and sauces. “Their taste profiles are exciting. We love them,” Hartman said of today’s emerging customers. “As a chef, Ryan [Krebs] loves them because they challenge the palate.”

Rutter’s newest initiative is increasing its sourcing of local goods.

grab-and-go and restaurant menu produce is sourced from family farms throughout Pennsylvania, Maryland, New Jersey and Virginia. “Foodservice is at the core of our company. It has been since we started as a dairy back in 1921,” said Scott Hartman, Rutter’s president and CEO. “Food has been a core part of our sales and it’s ever-increasing. It drives so many other categories in our stores, from the beverages that go with foodservice to the snacks and the candy, and just the foot traffic it drives during key dayparts.” As it pertains to dayparts, Rutter’s has been a leader at expanding convenience foodservice beyond breakfast and lunch. “We’re continuing to figure out how to grow the evening daypart, which is the one that I think we’re all after in the industry,” Hartman told Convenience Store News. “We are probably out in front of that with all the different offerings we have, but we know there’s still a long way to go.” Food tastes are changing at an ever-increasing pace, so staying on-trend with consumer wants and desires is very important to Rutter’s.

On its new initiative to buy from local vendors, Hartman said he’s been studying the fresh and local trend for several years. “We saw a lot of it in Europe. I take my management group to Europe for study trips and it is something that’s been on our radar for a while,” he explained. “We just felt that now is the time to do it — that we can actually execute it now. Years ago, it would have been very difficult with the supply chain then. “Fresh and local will be hitting more and more convenience stores and we’d like to be the leader in that trend because customers are telling us that’s what they want,” he added. “It doesn’t have to be thousands of items. You just want to know the key ones and then use them in multiple ways.” For example, local blueberries that are sold in a plastic container from the fresh, grab-and-go cold case are also being used in frappes at the built-to-order beverage counter.

THE OTHER 2018 FOODSERVICE INNOVATORS AWARDS WINNERS ARE: Prepared Foods Innovator of the Year: MAVERIK INC.

“I think you have to have the spirit of a chef. You have to try something new and different. If it works, it stays; if it doesn’t, we move on to the next trend,” said Hartman.

“With the combination of Adventure’s First Stop and Bonfire Grill, Maverik has been very innovative with branding itself and using its foodservice program to become a serious food destination in the company’s core markets,” said one member of the CSNews Foodservice Advisory Council, who was impressed with the retailer’s prepared foods offering.

Rutter’s is particularly adept at meeting the needs of both its traditional audience, as well as the large number of newer, younger customers arriving at its stores. Rutter’s menu includes traditional indulgent food, like its

Selected as the 2018 Prepared Foods Innovator of the Year, this is the fifth time that Salt Lake City-based Maverik, which operates more than 300 stores in 11 western states, has won a Foodservice Innovators Award. In 2012 and 2016, Maverik was honored for Best New Foodservice Offering.

Crowds flock to Maverik store grand openings. 48 Convenience Store News C S N E W S . c o m

The

POWER OF WORKING TOGETHER

GROWTH Our retail relationships are built on our desire to work collaboratively and effectively to meet the diverse needs of our customers and their shoppers.

SOLUTIONS Our collaborative approach means customizing our efforts to the needs of our customers and providing differentiation.

TOGETHER, WE WILL DELIVER REAL, SUSTAINABLE, PROFITABLE GROWTH.

Campbell’s value to Our Customers is centered around REAL and comes to life through a commitment to our customers and our consumers. We are committed to building better partnerships because real success comes as we all work together.

FOOD We are transforming our food, beverages, and snacks, making them affordable and accessible to all.

INSIGHTS We know what both today’s and tomorrow’s shoppers want and how they want it. These real, actionable insights enable us to drive loyalty, increase trips, and maximize basket size.

COVER STORY

This year, Maverik launched a new fresh sandwich line to replace its hoagies, which consisted of meat and cheese in a hoagie roll that the customer purchased and then dressed themselves. The new fresh line of ready-to-eat sandwiches starts with new bread and also includes new meats and cheeses, and new sauces. Preparation steps have been developed that allow Maverik team members to dress the new sandwiches without them getting soggy.

Introduced in 2009, Maverik’s Bonfire brand ties all of its prepared food offerings under an adventurous theme.

In 2013, the retailer won for Best Foodservice Limited-Time-Offer (LTO) or Promotion, before winning the Foodservice Innovator of the Year award in 2014. So, why is Maverik the 2018 Prepared Foods Innovator of the Year? “The Bonfire line is on-trend, flavorful and provides variety. It also aligns with their overall branding and marketing strategies, keeping the customer experience fluent throughout the chain,” said another Foodservice Advisory Council member. The Bonfire brand, originally introduced in 2009, ties Maverik’s food items together under a single identity with an adventurous theme. By the fall of 2013, Maverik decided to take its foodservice to the next level by launching the new Bonfire Grill made-toorder program. The Bonfire Grill concept, an open kitchen where customers can watch the preparation of items like pizza and tacos, began testing in late 2014 and is now included in all newbuild Maverik stores. Maverik stores have also been redesigned, placing food front and center. Other significant moves that have built up Maverik’s foodservice program are: • Experimenting with creative LTOs, some of which become mainstays on the menu, such as the MOAB (Mother of All Burritos); • Examining its products and improving the quality of ingredients used; • Hiring a new corporate chef, Kyle Lore, a fine-dining culinary expert who’s brought a new perspective to the business; and • Creating a taste profile that is spicier and more flavorful compared to its c-store, quick-service and fast-casual competitors.

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

Varieties include California Club, Turkey Gouda, Righteous Italian and Buffalo Chicken Ranch. The new sandwiches were first tested in two stores, then expanded to a 10-store test to see actual sales results, and then moved to 30 stores to ensure ingredient distribution was right before being rolled out across all locations. “Foodservice is an important part of Maverik’s business model, and is becoming even more critical,” said Brian Sullenger, the retailer’s FRESCH category manager for grab-and-go. “We’ve been in the foodservice business a long time and our customers have come to trust that we have quality food for a competitive price.” Sullenger also told CSNews that Maverik recently extended its Hispanic menu into nachos and salads, and plans are in the works for line extensions in the retailer’s most successful prepared food segments.

Hot Beverages Innovator of the Year: 7-ELEVEN INC. 7-Eleven, the Irving, Texas-based operator, franchisor and licensor of more than 67,000 stores in 17 countries, including 11,800 in North America, has been honored twice before in the Foodservice Innovators Awards program, but this is the first time the retailer is being recognized in the Hot Beverages category. Previously honored as the Cold & Frozen Beverages Innovator of the Year in 2014 and for the Best Foodservice LTO or Promotion in 2016, 7-Eleven this year wins for multiple improvements it has made to its hot coffee program. 7-Eleven has been adding single-origin, sustainably sourced brews. Late last year, the retailer headed south to the Cajamarca region of Peru for a Rainforest Alliance Certified coffee made

7-Eleven went to Africa for the first limited-time coffee under its new, premium Seven Reserve brand.

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COVER STORY

with 100-percent Arabic beans. The Rainforest Alliance is an international nonprofit organization that seeks to conserve biodiversity and ensure sustainable livelihoods. The Peruvian coffee has citrus notes complemented by vanilla, cinnamon and berry undertones. The hand-picked beans are grown in the high Andes Mountains of Peru. They are then authentically roasted to a medium level for a smooth, rich taste. “Today’s coffee-drinkers are more sophisticated and, in addition to wanting a greattasting cup of coffee, many also are looking for something extra,” Raj Kapoor, 7-Eleven’s senior vice president of fresh food and proprietary beverages, said at the time of the Peruvian brew’s launch. “Millennials, in particular, want coffee crops that are sustainably grown, sourced directly from small farms, and made from single-origin beans rather than blends.” Prior to introducing the Peruvian brew, 7-Eleven featured LTOs of single-sourced coffee from Matagalpa, Nicaragua and Chiapas, Mexico. In addition, the retailer’s popular 100-percent Colombian coffee is now made with Rainforest Alliance Certified single-origin beans. What’s more, this past April, 7-Eleven went to Africa to source the first limited-time coffee available under its new Seven Reserve brand of fresh-brewed premium coffees. The Seven Reserve Africa Blend is a 50-50 combination of 100-percent Rainforest Alliance Certified Arabica beans cultivated on small farms in Ethiopia and Rwanda. Foodservice Advisory Council members were impressed with how 7-Eleven is introducing all these new coffees from exotic locales known for producing fine coffee. They also gave credit to 7-Eleven for working with Conservation International to set measurable corporate social responsibility (CSR) goals to reduce its environmental footprint. As part of its CSR objectives, 7-Eleven says it will continue to seek out responsibly sourced coffees, and other products and packaging with less environmental impact.

Cold & Frozen Beverages Innovator of the Year: CIRCLE K Circle K, a wholly-owned subsidiary of Canada-based Alimentation Couche-Tard Inc., debuted in the Foodservice Innovators Awards winners’ circle in 2016 for its revamped hot coffee and hot beverage program. This year, the retailer, which is part of Couche-Tard’s network of 10,000-plus

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

This summer, Circle K’s “Your Cup. Your Rules.” initiative boosted brand awareness and customer engagement around its Polar Pop offering.

convenience stores throughout North America, is being recognized as the Cold & Frozen Beverages Innovator of the Year. Judges on the council raved about the successful promotions that spurred more sales of cold and frozen drinks by the chain this past summer. In July, Circle K’s “Your Cup. Your Rules.” initiative enhanced brand awareness and customer engagement by inviting shoppers to quench their thirst with its signature Polar Pop cup. In the United States, Circle K sells 17 Polar Pops every second, according to the company — a factoid that shocked several of our judges. The “Your Cup. Your Rules.” initiative showcased how Polar Pop helps customers create the drink of their dreams and encouraged consumers to interact with the brand. During the promo, popular social media influencers, expansive digital and billboard advertising, and on-site events drove Circle K customers to fill up their cup and share their enthusiasm with the hashtag #DONTBETHIRSTY! Additionally, Circle K employees were featured in an internal video contest to show their pride in Polar Pop and how they share it with customers. The retailer followed up the Polar Pop promotion by dispensing more cool treats on Free Froster Day, held July 10. Froster is its frozen beverage brand. Circle K stores offered free Froster drinks as it introduced a new Mango Fire Froster variety to its dispensed beverage lineup. U.S. stores were expected to give away an estimated 10,000 free medium Froster drinks that day. This promo was enhanced by the use of an app-based coupon. Earlier this year, Circle K awarded five shoppers a $25 gift card each through a Facebook promotion to support the launch of another new Froster flavor, Sweetos Cinnamon Sugar, inspired by PepsiCo/Frito-Lay’s Cheetos brand’s Sweetos cinnamon sugar puffs.

Best New Foodservice Offering of the Year: BP/ampm Based in La Palma, Calif., and operator of approximately 1,000 franchised c-store locations, mostly in five western states, BP/ampm is revitalizing its foodservice offer to make it fresh and relevant, as part of a larger project known as “Project Mojo.” Included in Project Mojo is a new coffee program and a new fresh food program, both of which caught the attention of our judges and earned the retailer the award for Best New Foodservice Offering of the Year. This is the first time in the Foodservice Innovators Awards winners’ circle for BP/ampm, which appears to be challenging the c-store industry maxim that all of the best

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recognition of Pilot Flying J for the improvements the travel center operator made to its fresh prepared-food offer. This year, judges put the spotlight on Dash In, which operates 50 c-stores across Virginia, Maryland and Delaware. The retailer’s new 5,600-square-foot store in Chesterfield County, Va., is an example of why industry-watchers are taking note of this up-and-coming regional chain. “They’re building new stores with a strong food focus,” noted one Foodservice Advisory Council member. “As a competitor in the food-heavy Mid-Atlantic, Dash In is beginning to carve out a vision of their own regarding coffee and high-quality foodservice.”

BP/ampm is revitalizing its foodservice offer to make it fresh and relevant.

U.S. convenience foodservice retailers are located in the Mid-Atlantic states. “We are dialing up the offer, making it current and fresh, and aligned with the trends we see around our consumer base,” Chief Operating Officer Donna Sanker explained to CSNews during a visit to the brand’s Southern California headquarters late last year. Sanker explained that the retailer spent 2017 getting back to basics with a “Simple. Fresh. Delicious.” mindset. New to the ampm chain’s prepared food offering are all-natural, USDA-certified beef burgers; the re-release of an all-natural version of its No. 1 food product, the BBQ Rib Sandwich; and the launch of a new grab-and-go sandwich line. As with most c-store retailers who periodically refresh their dispensed beverage program, ampm also knew it was time to revitalize that offering. Entering into a new playing field for the brand by capitalizing on the latest customer craze, the retailer introduced cold brew coffee and frozen coffee. The debut of both products help consumers recognize that they can get a good-quality and differentiated beverage solution at ampm.

“During the past three years, we worked closely with our design and construction teams to transform the Dash In store environment,” said Darleen Nascimento, director of brand marketing at Dash In. “We have been working to reimagine and elevate the Dash In brand experience, and the neighborhood store concept really embodies those efforts.” Dash In’s made-to-order Chef’s Craveable Menu features artisan sandwiches, wraps and salads made fresh in-house every day, as well as all-day breakfast with freshly cracked eggs. The breakfast menu includes a flour tortilla filled with scrambled eggs, potatoes and American cheese. “Our newest Dash In is a demonstration of our commitment to creating a store design that offers an elevated brand experience for our customers,” stated Dash In President Julian B. Wills. Headquartered in La Plata, Md., The Wills Group is the parent company of SMO Energy. In addition to Dash In Food Stores, The Wills Group is a leading provider of propane, heating oil and HVAC equipment in southern Maryland. Its other business interests include Splash In ECO Car Wash, SMO Motor Fuels and Potomac Energy Holdings. CSN

Fresh food has the ability to attract new customers and CSNews’ judges feel ampm is on the right track to improving consumer perceptions about “gas station food” on the West Coast.

Foodservice Innovator to Watch: DASH IN Dash In, a division of The Wills Group, is the 2018 Foodservice Innovator to Watch. This award category debuted last year with the

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

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Localize Your Product Mix With local products becoming more important to consumers, c-stores that develop partnerships with local vendors can capitalize on this growing trend By Tammy Mastroberte

to consumers today than in the past. While localization spans multiple categories, food and beverage is at the top of the list. Whether sitting down for a meal at a restaurant or shopping for food, consumers are looking for more information on what they are eating and drinking, and are especially interested in items that are fresh. In many cases, local food and produce equals fresh.

LOCAL PRODUCTS ARE MORE IMPORTANT

“Millennials and Gen Z have challenged us to have more transparency in everything we do, and they want to trace food back to the source,” said Ryan Krebs, director of foodservice at Rutter’s, based in York, Pa., and operating 71 convenience stores. “They are more attached to the shopping experience than the previous generation. They want to know where it comes from, and there is a perception that it’s fresher if local because it travels less and sits for less time in the store.”

In the convenience store space, community is important, and many chains already work with local businesses and charities in a variety of ways. This makes the convenience channel a prime player to offer local products because the community is often familiar with them already, and tend to be more loyal and supportive of businesses in their area. In fact, 55 percent of consumers in the United States have very little confidence in big brands, according to the 2017 Global Future Consumer Study by management consulting firm A.T. Kearny. This is up from 36 percent in 2012. “Our community is very passionate about keeping the money in the community and, with us being in business for 85 years, we pride ourselves as being locally owned. We even have a sign that says, ‘Thank you for shopping local,’ when you walk out the door,” said Jim DeFilippis, vice president and general manager of NOCO Express, the Tonawanda, N.Y.-based operator of more than 35 c-stores. “There are also a lot of products people grew up with that are ‘must-haves,’ so we support them because they have a good following.”

Choosing Local Products In another recent study by A.T. Kearny, Competing in an Age of Multi-Localism, 89 percent of companies globally indicated that they are already pursuing or considering pursuing localization. In the c-store space, the majority of retailers are turning to food and beverage when choosing local products — although there are some branching out into other categories as well. In addition, some retailers that have been offering local products for years are now advertising them in a bigger way. “We had over 70 food items already local before we started telling the story about it, and now we are up to more than 85 on our foodservice menu, and seven or eight local produce items,” Krebs said, noting that local offerings have become a main driver for Rutter’s. The chain even created a category manager position focused on local products and promoted

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

Â®

Call to Action l If you’re looking to add local products to your assortment, start out by creating a definition of what “local” means to your business. It could mean manufactured in the state, or produced within a certain mile radius of your headquarters. l Once you’ve set your definition, investigate what is available that falls into that footprint. You’ll likely be surprised at how many options you find. l Don’t limit yourself to just local foodservice items, or local beer and wine, which is where many retailers start. Think outside the box, such as a partnership with a florist in the area or a local farmers market. l Check if your existing distributors have any local products available. Some of them may carry products that fit into your definition of local, and they’re already delivering product to your stores. l Once you find partners and get distribution set up, it’s time to advertise so that shoppers know you carry local products and can easily identify them in the store. Product tags, voiceover and digital screen messaging in-store and at the pumps, and social media promotion are all valid approaches.

NOCO Express partners with several local businesses, including Charlie the Butcher and doughnut shop Donut Craze.

Cheri Booth from her role as foodservice quality assurance manager. In her new role, Booth oversees all aspects of local and fresh procurement, which includes produce, seasonal fruits and vegetables, foodservice, snacks, beverages, beer and wine. “This isn’t going away. This is going to be around for a couple of lifetimes, so we felt we needed to have someone who could become an expert and own everything local to drive the category,” Krebs explained. “She has already started new relationships calling out local wines and potato chips.” For c-stores looking to add more local products to their assortment, Krebs recommends first creating a definition of what “local” is to them, and then investigating what is available that falls into that footprint. At Rutter’s, local means it’s grown or manufactured in the state of Pennsylvania or within a 100-mile radius of the retailer’s corporate headquarters in York. “C-stores would be surprised how many opportunities for local partners they have in their territory,” he said.

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

C-store operators should also think outside the box when it comes to local products because it doesn’t only have to be foodservice, or local beer and wine, which is where many start. At NOCO Express, the chain partners with a local florist that has a couple of shops in the area. The florist delivers directly to the stores and maintains the displays. “It’s in 40 percent of our stores. They offer fresh bouquets, arrangements and single roses. Where can you get nice flowers in a c-store?” DeFilippis pointed out. “I get a percentage of the sales in the store, and they even supply the refrigerated coolers, so the arrangements stay fresh. I ran electric for the cases and we met halfway on the expenses.” NOCO also partners with a local doughnut shop called Donut Kraze, which supplies fresh doughnuts to select stores every morning. So far, Donut Kraze is in eight locations. Another partnership, with Costanzo’s Bakery, supplies local bread for its sandwiches. “They sell soft, dense bread that everyone who grew up here is used to, so we toast them for sandwiches. They are also in business in the area for more than 80 years,

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Johnny Junxions, a single store, offers local produce and seasonal items through a partnership with a farmers market.

and we use thousands of rolls a month, so it’s a strong partnership,” DeFilippis explained. In yet another food-based move, NOCO Express partners with a local butcher, known as Charlie the Butcher, who has a couple of locations in the area. NOCO runs his franchise out of a few of its c-stores. Charlie the Butcher is best known for his roast beef sandwiches with horseradish on Kimmelwick rolls with caraway seeds and salt. Offering local products, though, is not just for c-store chains with bigger buying power. Single-store owners and small operators can localize their product mix, too. At Johnny Junxions in Bedford, Ind., which opened in 2004, the single store offers local produce every year from June through October. The produce is sourced from a farm approximately 45 minutes from the store. What started as just watermelon, corn and cantaloupe being sold out of the back of a trailer outside the store has now grown to include tomatoes, potatoes, apples and even seasonal flowers, pumpkins and squash during the fall. “The farmer asked if we wanted to sell some fall goods. We tried it and they sold out so fast. We went from 25 mums the first year to 1,500 the second. Now, we sell 2,500 mums per year, and around 3,000 watermelons,” said Mark Murphy, marketing manager at Johnny Junxions. The store also offers local honey that is pro-

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

duced two miles away. Johnny Junxions purchases it and resells it in the store, and does the same with Claeys Candy, a local candy shop. Old-fashioned hard candy and peanut brittle is featured in the fall.

Sourcing & Distribution Retailers already diving into localization at their stores don’t report difficulty in finding willing partners in their areas. In fact, once companies in the area realize the stores are carrying local products, they will often reach out to the retailer themselves. “Once we sent out the release that we hired a local category manager, the phone started ringing,” said Krebs of Rutter’s. “People want to work with you.” At NOCO, DeFilippis finds it works both ways. Sometimes, he is approached and other times, he will discover a product that he would like to carry. He did this with Platter’s Chocolates based in Buffalo, N.Y. They are known for their Orange Chocolate Sponge Candy, so the chain now carries it in the stores using large displays.

NOCO Express stores sell candy from Platter’s Chocolates, a Buffalo institution.

“We also offer candy and chocolate for holidays like Easter and Valentine’s Day,” he noted. “It’s a point of difference because 7-Eleven, for example, doesn’t play in that sandbox, being managed out of Texas.” It’s the same at Johnny Junxions. Offering the produce and fall items each year started by them approaching a local farmer, but once people began to realize the store had a focus on local, the offers came to them. Murphy recommends c-stores interested in offering local produce or other farmers market items do their research first. “I would see how many farmers markets are around the store or stores to know if there is a need for it in your

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

area. Some might only be open a few hours a day, and you can fill in that need,” he advised. “The farmers market we buy from is far enough away that it’s not competition. Find someone who is willing to sell you product and be consistent with it. You don’t want fresh tomatoes one week and then not have it the next. People don’t like that.” The one challenge that can occur with localization is finding distribution for the local products. In some cases, a company can pick up the product themselves — Johnny Junxions does this. Once a week, Murphy travels to pick up the produce, while the honey vendor delivers the product to the store. Meanwhile, at NOCO, the local bakery delivers fresh bread every day to the stores, but one of the retailer’s rules is that all its vendors must have liability insurance with a threshold of $1 million. “That is in case they come on the property and get hurt or hit one of our pumps or something,” DeFilippis said. For small and large chains alike, checking with their distributors — who are already delivering product to the stores — is a great place to start. Some of them may already carry products that fit into the local footprint, according to Krebs.

Because Rutter’s has 71 stores, buying power is an advantage the company can use to have its distributors add products they might not already be carrying. “We have one company out of Altoona, Pa., doing pepperoni rolls for us that are made by hand, and we connected them with our distributor U.S. Foods so they could distribute to us,” said Krebs. “If there is a product I want, because of our volume and credibility with the distributor, they will often figure out how to get the product. That is an advantage we have over the single-store operator.”

Calling Out Local Once you find partners and get distribution set up, it’s time to advertise so that shoppers know you carry local products and can easily identify them in the store. At Rutter’s, a local tag is used physically and digitally. At its kiosks for made-to-order items, there is a local tag next to the sausage, for example. For produce items such as watermelon or blueberries, they get a local tag placed right on the package. “We also have messaging with store voiceover and at the pumps to tell our story, as well as in-store television

screens,” Krebs noted, adding that Rutter’s website also lists all the local manufacturers the chain works with and features videos from the farmers and manufacturers so that customers can take a deep dive. Utilizing social media is another way to get the word out, and is one of the approaches Murphy takes at Johnny Junxions. Like Rutter’s, the store utilizes in-store screens for messaging, and it created roadside banners that call out local homegrown tomatoes and Indian sweet corn for sale.

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“The majority of our customers know it, but we always pick up new ones each year,” Murphy said. CSN

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FriendShip Food Stores’ new concept store is just one step of its transformational journey By Melissa Kress for FriendShip Food Stores. While most people were taking family vacations to the Grand Canyon or Disney World, FriendShip team members were putting the finishing touches on the convenience store retailer’s new concept store in Elyria, Ohio.

THIS SUMMER MARKED A MILESTONE

The 5,500-square-foot store welcomed its first customers on July 26. It is the largest of the 25 stores the company operates along the shores of Lake Erie, from Toledo to Cleveland. The concept store features many firsts for FriendShip, including its first new store of 2018, the introduction of the FriendShip Fuel brand, and the unveiling of its proprietary FriendShip Kitchen restaurant. As the retail arm of family-owned Beck Suppliers Inc., FriendShip is no stranger to the convenience store industry, nor is it a stranger to foodservice. However, the retailer began really ramping up its foodservice game about a year ago when industry veteran Greg Ehrlich joined the company as chief operating officer of Beck Suppliers and long-time convenience foodservice executive Ed Burcher joined the company as vice president of foodservice. As Burcher explained to Convenience Store News, FriendShip has been in the foodservice business for quite a few years. Its first offering included coffee and fountain drinks when it entered the convenience channel

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

more than 30 years ago. Then, its initial prepared food program tapped third-party expertise for branded chicken and pizza offerings. “Over time, these offers served FriendShip well, but they did need to be refreshed. In the last five years, more focus has been on understanding and developing a FriendShip offer to build and expand the food items across all stores,” Burcher said. As time went on, the Ohio-based chain realized there was more flexibility in a proprietary offer. The challenge was gaining the internal skills needed to develop, support and grow such an offer, when it had successfully relied on branded programs in the past. “It was a real change and we needed to find the right mix of offer, skills and people to make this happen in an effective way,” Burcher said. “A proprietary offer lets us build our brand to our guest — the only place you can get FriendShip Pizza or FriendShip Famous Chicken is in a FriendShip store.” This shift comes as the convenience store industry as a whole is moving away from its traditional reputation as “gas station food” to a healthier, better-for-you lineup. While larger chains like nearby competitors Sheetz Inc., Wawa Inc. and QuikTrip Corp. were grabbing headlines around their stepped-up food programs, FriendShip quietly navigated the waters — and it wasn’t just a foodservice refresh achieved.

An Entirely Brand-New Experience FriendShip’s journey to this milestone has actually been about refreshing the brand and its customer experience, not just its foodservice offering.

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The journey to the FriendShip Kitchen concept originated two and a half years ago.

The first step was realizing the need to change, according to Gregg Edwards, vice president of operations, especially since FriendShip was operating well, performing at expectations and growing. “Change is hard at the best of times and when you really don’t have to [change], you can face obstacles in gathering support. It was through a strategic planning process where we realized that we need to improve our brand presence and image,” Edwards explained. This began two and a half years ago with the idea of a FriendShip Kitchen and building a store around that idea. Once the strategy planning process was completed, the design phase began. A year later, FriendShip’s remodeled Port Clinton, Ohio, store debuted the FriendShip Kitchen. The remodel also displayed the retailer’s new graphics and other refreshed materials. This opening brought to light some further changes needed. “Part of this opening highlighted the need for more focus on the food and beverage offer, as well as the supporting processes needed to

support,” said Brian Beck, owner and retail division leader of Beck Suppliers. With the planning already underway for its first new-build FriendShip Kitchen store, the retailer started refining the layout, equipment and processes to successfully bring the new image and store concept to customers. After one more major remodel — its Vermilion, Ohio, location — FriendShip capped off its efforts by cutting the ribbon on the Elyria store.

The Journey Isn’t Over The retailer continues to learn and apply those learnings to its stores. Another new-build FriendShip Kitchen store is slated to open in November. According to Beck, this location will feature “a slightly different layout and will give us the ability to evaluate what works the best for our stores in 2019.” Store transformation aside, FriendShip’s strategic plan also includes a focus on its employees. The chain recently launched an initiative examining how to create high-performing teams coinciding with the opening of the Elyria store. “Learning and adjustments continue. Our goal is to create the atmosphere where these teams can operate at a better level than our competition and provide the best guest satisfaction possible,” Edwards said. What can the industry expect next from FriendShip and Beck Suppliers? Continued improvement, according to the company’s leadership. “We continue to look for ways to improve our offer for our guests, and how we need to grow our skills and capabilities from within to deliver this,” Burcher said. “This does not stop and will be a focus moving forward so that we provide the best product, service and offers for our guests.” CSN After remodeling two existing stores to this new concept, the first new-build FriendShip Kitchen store opened July 26.

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

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What’s Hot on C-store Menus? A new snack bar from 7-Eleven finds magic with consumers 7-ELEVEN INC.’S NEW MAGIC BAR, introduced in July, is

a sweet snack or dessert bar made with a graham cracker crust, chocolate and butterscotch chips, walnuts and shredded coconut.

OPERATOR: 7-Eleven Inc. ITEM TYPE: Limited-Time Offer DATE: July 2018 PRICE: $1.99 A deliciously decadent dessert made with a crunchy graham cracker crust, a mix of chocolate and butterscotch chips, walnuts and shredded coconut. Tastes as magical as it sounds.

Consumers surveyed through Datassential SCORES, which tracks six key metrics, indicate the Magic Bar will perform strongly. It scored in the 98th percentile for Branded Purchase Intent. It’s also a customizable item well worth borrowing inspiration for your c-store as it is mobile, flavorful and a good value to customers.

and package, easy to customize (maybe your version adds those marshmallows), and easy to sell (stick them next to the register or coffee bar to encourage impulse buys).

Market It as a Snack, Dessert or Both 7-Eleven created a bar with versatile ingredients that can be enjoyed as a dessert or a snack. Datassential’s recent Keynote Report: Snacking suggests any food can be considered a snack. The Magic Bar’s addition of walnuts and coconut can speak to health-conscious consumers with a sweet tooth. Create versions with high-protein, fruit, go nut-heavy or replace the graham cracker crust. Hit different demographics of consumers with different flavors. CSN

A Fresh Idea With Simplicity Consumers see the Magic Bar as a fresh concept: it reached the 82nd percentile for Uniqueness thanks to its mix of different ingredients, like butterscotch chips and coconut. Yet, it still has a familiar feel with its graham cracker crust and chocolate chips, reminiscent of s’mores minus the marshmallows. The main reason you should put this concept to work in your c-store: It’s easy. These bars are easy to produce

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

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Convenience & Foodservice: A Good Pairing The foodservice category continues to thrive in the channel, with more growth possible By Angela Hanson FOR CONVENIENCE STORE RETAILERS

that offer foodservice programs, 2017 reaffirmed what everyone already knew: It’s a foodservice world and c-stores must live in it if they want to maximize growth and profits.

for 68 percent of the category’s share and 11 percent of in-store sales. Prepared food saw a 4-percent increase in average perstore sales.

Overall foodservice sales increased 3.6 percent across the c-store industry in 2017, while average per-store sales of foodservice rose 3 percent, according to a May 2018 study conducted by Q1 Consulting Services, the results of which were provided to Convenience Store News.

Hot dispensed beverages was a distant second, accounting for 21 percent of the category’s share and rising 1 percent in average per-store sales. Meanwhile, cold dispensed and frozen dispensed beverage sales were flat to slightly negative for the year.

Prepared food led the way for the category, accounting C-store retailers report that hot sandwiches, non-sandwich breakfast foods and hot breakfast sandwiches, in particular, saw an increase in sales in the past year.

Foodservice Metrics PERCENT OF IN-STORE SALES

AVERAGE ANNUAL STORE SALES

TOTAL INDUSTRY SALES (in millions)

2017

% Change

2017

Prepared food (prepared on-site or off-site)

11%

$164,131

$25,159

4.6%

68%

Hot dispensed beverages

$49,652

$7,611

1.7%

21%

Cold dispensed beverages

$19,663

$3,014

1.1%

Frozen dispensed beverages

$7,789

-1%

$1,194

-0.1%

16%

$241,235

$36,978

3.6%

100%

Foodservice Total

Source: Convenience Store News Market Research, 2018; Q1 Consulting Services, 2018

% Change

FOODSERVICE SHARE

2017

The impact of foodservice on a c-store’s business goes beyond just the category financials, too. On a scale of 1 to 5, with 5 being the most important, c-store operators surveyed in the Q1 Consulting study cited foodservice as being important to: driving transactions (a score of 4.55), satisfying the customer (4.46), and maintaining customer loyalty (4.65). So, enhancing a foodservice program has the potential to drive overall improved results for a c-store.

On the Menu While many c-stores have begun offering more adventurous fare to capitalize on the millennial generation’s desire for new eating experiences, the most commonly offered prepared foods in the past year were long-standing favorites: cold deli sandwiches/subs/wraps, fresh bakery items, salads, fruit cups, soups, hot breakfast sandwiches, hot dogs and hot sandwiches. On the beverage side of foodservice, long-standing favorites like coffee, espresso-based beverages, carbonated soft drinks and iced tea also remained the most commonly offered. Expanding one’s foodservice offering can attract a bigger market, but doing so without regard to what current customers and potential customers want could have the opposite effect. Retailers surveyed indicated the most important factors they consider when adding a prepared food item are the availability of branded products, consistency, buy-oneget-one offers and shelf life. Healthy or

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better-for-you attributes, including natural or organic, are not currently a top factor, but this could change in the future as consumers evolve in their healthfulness.

trial for new items, 64 percent of retailers cited in-store signage as the most effective, followed by reduced price (39 percent).

C-stores face more foodservice competition than ever, as any other foodservice retailer within a certain vicinity of the store qualifies as a competitor. Interestingly, though, retailers report that the “food everywhere” message, or the presence of foodservice in new and evolving channels, is actually helping the overall market and having a positive impact on c-store prepared foods.

The Consumer View

To increase foodservice sales, 89 percent of retailers pointed to combo meal deals as their most effective promotional activity, followed by reduced price (67 percent), two-for deals (27 percent) and in-store signage (7 percent). To create

In-Store Gross Margins AVERAGE GROSS MARGIN PERCENTAGE

65%

Frozen dispensed beverages

62%

Cold dispensed beverages 52%

Health & beauty care

51%

Ice

49%

Hot dispensed beverages

44%

Candy/gum

39%

Prepared food (prepared on-site or off-site)

38%

General merchandise

36%

Alternative snacks Packaged sweet snacks

36%

Ice cream & frozen novelties

34% 31%

Edible grocery Salty snacks

31%

All other merchandise

30% 30%

Non-edible grocery

24%

Other tobacco

22%

Wine & liquor

17%

Fluid milk products

16%

Publications

14%

Cigarettes

Source: Convenience Store News Market Research, 2018; Q1 Consulting Services, 2018

Importance of Foodservice On a scale of 1 to 5, where 5 is most important, how important is foodservice in terms of…

TOP

Mean Summary (1 to 5 Scale)

Driving transactions

100%

4.55

Satisfying the customer

100%

4.46

Maintaining customer loyalty

100%

4.65

BOX

Driving store traffic

99%

4.41

Achieving profitability goals

99%

4.61

Achieving sales targets

98%

Source: Q1 Consulting Services, 2018

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

Age and income make a greater difference. Consumers aged 16 to 27 are the most likely to say they always or often eat away from home (at 73 percent), followed by those aged 35 to 44 (66 percent) and those aged 25 to 34 (65 percent). Habitually eating away from home is also correlated with a higher income level, as 71 percent of consumers that earn $75,000 to $99,999 annually report always or often eating away from home, followed by 67 percent of those that earn $100,000 or more, and 62 percent of those that make $50,000 to $74,999.

As eating habits shift away from consuming three meals per day to more frequent snacking and grazing throughout the day, c-stores are well positioned, especially if they can offer products that are fresh, healthy or “quick energy” producing, according to Q1 Consulting.

19%

Beer/malt beverages

The opportunity is there: When asked how often they ate away from home, 61 percent of consumers surveyed in the Q1 Consulting study answered always or often. When broken down into demographic groups, there was little difference between the percentage of men and women who always or often eat away from home, at 60 percent and 61 percent, respectively.

Where away-from-home eating occasions take place depends on what type of need the consumer is looking to satisfy. For example, they are more likely to visit full- or limited-service restaurants for meals, and more likely to visit c-stores when they want a snack or a beverage.

33%

Packaged beverages

Along with knowing their own strengths and limitations as foodservice retailers, c-store operators must maximize their understanding of consumer habits.

4.45

Thirty-two percent of consumers report that they typically purchase prepared food/ grab-and-go meal items in the afternoon, from 2 p.m. to 5:49 p.m. Lunchtime (11 a.m. to 1:59 p.m.) is the second most popular daypart for c-stores, at 25 percent. Unlike some c-store staples, however, consumers tend to pre-plan their foodservice purchases, with 66 percent indicating they make the decision to buy prepared food/ grab-and-go meal items before entering the

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FOODSERVICE

Prepared Foods Offered

Types of Dispensed Beverages Carried

Which of the following prepared food, grab-and-go or made-to-order items do you offer?

% OF RESPONDENTS OFFERING…

Cold deli sandwiches, subs and wedgestyle sandwiches, including wraps

97%

Fresh bakery items, such as muffins, doughnuts, pastries and bagels

94%

Salads, fruit cups, soups and hot entrées

93%

97%

Iced tea Juice

88%

Water

87% 85%

Lemonade

Hot breakfast sandwiches, breakfast burritos and breakfast wraps

90%

63%

Energy drink 45%

Iced coffee

Hot dogs, corn dogs, taquitos and other roller grill items

80%

19%

Sports drink Cold brew coffee

Hot sandwiches (meat on a bun style), burritos and tacos

49%

Pizza, including slices, whole pies and personal pizzas

28%

Breakfast items such as French toast, sausage, oatmeal and yogurt parfaits

10%

Hot pretzels, nachos with cheese/ salsa and bite-size warm foods/snacks French fries, wedges, tater tots and potato sticks

99%

Carbonated soft drinks

100%

Coffee Espresso-based beverages/cappuccino

98%

Tea Hot chocolate

90% 16%

Fried chicken, rotisserie chicken, 1% tenders and nuggets

Source: Q1 Consulting Services, 2018

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store vs. 34 percent who make the decision while inside the store. Once inside the store, the biggest influence on the decision whether to make a prepared food purchase or not is how fresh the offering looks; this was cited by 82 percent of surveyed consumers as being important/very important. Other significant factors are grab-and-go/self-serve accessibility (66 percent) and how the product is displayed (62 percent).

Segment Competition What degree of impact have the following foodservice venues had on your foodservice sales over the past two years? Negative Impact

No Impact

Food trucks 3%

Positive Impact

44%

51% 51%

Drugstores (i.e., Walgreens, CVS) 3% Quick-service restaurants (i.e., Subway, McDonald’s) 5%

59%

38%

Other retailers (i.e., Target, Walmart, Meijer) 6%

Other convenience stores 10% Grocery stores with prepared foods 6% (i.e., Publix, Safeway, Kroger, Jewel Osco)

46% 64%

32% 47%

44%

55%

40%

Source: Q1 Consulting Services, 2018

Retailer vs. Shopper Attitudes on Critical Factors Based on the study results, a number of gaps exist between what retailers are delivering and what consumers are demanding.

What helps consumers judge whether a food product is “fresh?” Most will look for an expiration date on the package (57 percent), visually inspect the food through the package (54 percent) or check to see if the food is as warm or cold as expected (32 percent). Freshness is also the No. 1 better-for-you characteristic that consumers seek. However, opinions vary on the importance of being able to find better-for-you products in a c-store: 33 percent say it is somewhat important, while 28 percent say it is very important. Male customers aged 18 to 24 place slightly more importance on this than the average c-store customer. Upon making a prepared-food purchase, nearly eight in 10 consumers (79 percent) say they eat the item right away, while 17 percent eat it within one to two hours. More than half of prepared-food purchases are eaten by the buyer on the go while inside his or her car (57 percent). The other most common locations are at home (21 percent) and at work/ office (14 percent). CSN

Source: Q1 Consulting Services, 2018

Retailer vs. Shopper Gaps Analysis SAMPLES Consumers indicate samples would entice them to try new menu items. While this may be a common request (along with lower price), there is still a significant gap between what retailers offer in terms of promotions that drive trial and what consumers request.

Source: Q1 Consulting Services, 2018

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

SHELF-LIFE CLARITY C-store shoppers buy with their eyes. Not only does packaging have to be highquality, transparent and durable, the expiration dates (or “best consumed by” period) is important to consumers and a noticeable gap between the two parties.

SOCIAL CONSCIOUSNESS Today’s high-visitfrequency c-store consumer demands more from its foodservice venue. In addition to service, food quality and store appearance, corporate social responsibility factors — including biodegradable packaging, cage-free eggs, no preservatives, living wage, etc. — are areas many retailers overlook.

SOCIAL MEDIA With millennials ready to take over as the top food away-from-home demographic, social media is to them what high-tech stock options were to Gen X in the 1990s: they expect it. More retailers outside of the stalwarts (Wawa, Sheetz, QuikTrip, Circle K, 7-Eleven) must be active daily in social media.

TOBACCO

They’re Back Flavor bans are rearing their ugly head again in the legislative and regulatory arena By Renée M. Covino WILL THE TOBACCO CATEGORY LOSE all

its flavor? It’s a possibility now that regulatory and legislative attention is back on flavor bans — with seemingly more intensity than before. The debate around flavors in tobacco products reared its ugly head again in late March when the Food and Drug Administration (FDA) issued an advance notice of proposed rulemaking (ANPRM), titled “Regulation of Flavors in Tobacco Products.” The agency is seeking comments, data, research results or other information related to the topic. Potential regulatory options the agency could take are tobacco product standards, and/or measures related to the sale and distribution of flavored tobacco products, according to the notice. The FDA said it is taking a closer look at flavors in tobacco products to better understand their level of impact on youth initiation. It also believes there’s a need to explore how flavors, “under a properly regulated framework that protects youth, may also be helping some currently addicted adult cigarette smokers switch to certain non-combustible forms of tobacco products,” explained FDA Commissioner Scott Gottlieb. Michelle Minton, senior fellow at the Competitive Enterprise Institute, a non-partisan, nonprofit

public policy organization, calls this move by the FDA “unwarranted.” Speaking specifically about flavor regulation in electronic cigarettes, Minton said it would have a net negative effect on public health, as any action to limit flavor variety in vapor products would significantly reduce their attractiveness to existing smokers who might try vaping as a means of reducing or quitting smoking. The National Association of Tobacco Outlets (NATO), in support of tobacco flavors and the retailers that sell them, submitted comments to the FDA focusing on many different issues and concerns arising from the ANPRM, including: • The importance of consumer choice for flavored products, whether that be soft drinks, coffee, alcoholic beverages or tobacco products; • The likelihood of a significant illicit market for menthol cigarettes and flavored tobacco if the FDA mandates the elimination of flavors; and • The impact of banning flavors in tobacco products on the public health. Likewise, San Francisco-based JUUL Labs in a July submission to the FDA warned against a federal flavor ban. The vapor company raised concerns that such a ban would be a detriment to adult smokers wanting to switch from cigarettes and could drive U.S. consumers into an illicit gray market.

Near & Far Still, despite pushback in many forms, cities and states across the United States are forging forward with tobacco flavor bans, ahead of any federal regulation. The most notorious is San Francisco, where residents overwhelmingly voted to uphold a ban on all flavored tobacco, including menthol cigarettes and flavored e-cigarettes. Slightly more than 68 percent of voters cast ballots in favor of Proposition E in early June, which prohibits tobacco retailers from selling flavored tobacco products. This came despite R.J. Reynolds, the maker of best-selling menthol cigarette brand Newport, pouring more than $11.6 million into fighting it, according to media reports. A spokesman for R.J. Reynolds characterized the vote as “a setback for harm reduction efforts.” On the other side of the issue, however, public health groups maintain that Proposition E is an important step forward for public health. The happenings in San Francisco have since set off a chain reaction across the state of California. Oakland passed flavor restrictions that will soon take effect; outreach workers are contacting small retailers to educate them about the new ordinance. Also, the San Mateo County Board

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of Supervisors unanimously approved a ban that very much resembles the one in San Francisco. Outside of California, flavored tobacco is under fire, too. Nine states banded together this summer in support of a federal flavor ban. The Attorneys General of New York, Idaho, Massachusetts, Oregon, Illinois, Maine, New Mexico, Pennsylvania and Rhode Island collectively urged the FDA to ban the use of flavors, including menthol, in all tobacco products, saying that “tobacco companies use flavors to mask the harshness of tobacco and nicotine, thereby making it easier for new and younger users to become addicted.” And in Minnesota, a new law took effect in the city of Minneapolis as of Aug. 1, restricting the sale of all flavored tobacco products, including menthol, mint and wintergreen, to tobacco shops and off-sale liquor stores. The law reduces the availability of the products from 295 stores to just 29 tobacco outlets and 32 liquor stores. Sales of other flavored tobacco products were already restricted to tobacco stores since 2016. After the vote, convenience store owners in Minneapolis donned red T-shirts reading “Enough Is Enough” and

gathered outside the council chambers. The store owners said the restrictions will reduce their profits at a time when they’re already dealing with the city’s new paid sick leave and an upcoming $15 minimum wage. A handful of other cities, including Chicago, New York and Providence, R.I., already have restrictions in place limiting the sale of flavored tobacco products to adult-only stores. Tobacco retailers in general believe that menthol bans in more cities would be a very negative move for the segment, given its significant size. Menthol represents about 35 percent of the total industry’s cigarette volume, according to Bonnie Herzog, managing director of tobacco, beverage and convenience research at Wells Fargo Securities LLC. Herzog thinks a federal ban on menthol is “extremely unlikely,” but acknowledges that it is something for the industry to watch closely. Globally, the U.S. has lagged behind other nations in regulating menthol cigarettes. Canada banned the sale of menthol cigarettes last fall, and a similar measure for the European Union will take effect in 2020. CSN

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PACKAGED BEVERAGES

Riding the Beverage Wave After a disappointing 2017, the packaged beverages category is back to making a splash By Renée M. Covino on packaged beverages unless you’re prepared to get hit by a few waves. After a disappointing 2017, the category is pleasantly resurgent so far this year, when comparing results for the first half of 2018 to the first half of last year.

DON’T TURN YOUR BACK

Judging from the dip in category sales last year, it appeared that convenience channel shoppers were moving away from artificially sweetened/high-carb drinks and turning to products with less sugar, lower calories and no artificial sweeteners. Sales of carbonated water and unsweetened sparkling brands were strong in 2017, while carbonated soft drinks (CSDs), enhanced water and sports/ energy drinks were generally declining, noted Jon Fiondella, account director for Epsilon Agency, a data-driven marketing company. “The trend seems to be shifting this year, as energy is becoming a focus for millennials and, importantly, for Gen Z,” Fiondella said, adding that as millennials hit the workforce, the promise of renewed energy becomes more and more important to them. “Gen Z, as a younger generation, seems less concerned with sugar, but they are still

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

attracted to the energy benefits that brands are now promising,” he said. Big brands have been seeing these trends coming and are innovating with new SKUs that meet the expectations of today’s c-store shopper, Fiondella observed. “We’re seeing many new energy drinks, sports drinks and enhanced waters hitting the shelves, delivering on a ‘better-for-you’ promise with enhanced productivity,” he said. “These brands are fortified with vitamins, extracts and energizing natural ingredients and are poised to revolutionize the packaged beverage industry.” The way Satoru Wakeshima, chief engagement officer at New York-based branding agency CBX, sees it, a few things have shifted over the past few years and had significant impact on the packaged beverage business. For one, people continue to seek healthier alternatives to CSDs — namely, beverages that can offer functional benefits and, most importantly, that taste good and are more interesting than just plain water. “Not surprisingly, a recent Mintel study indicated that 70 percent of consumers drink the beverages they do because they like the taste; and that will never change,” said Wakeshima. Another impactful shift: The energy drink market became oversaturated very quickly and 2017 was likely at the tail end of that explosion, he stated.

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“But what was born out of that period is what’s really interesting: the hybrid drinks that have emerged in the past year crossover all different segments of beverages,” he explained. They’re offering consumers familiar flavor profiles, nutritional and/or functional benefits, fewer calories and, in many cases, providing these things naturally.

How C-stores Can Hang Ten Beverage options are at an all-time high, according to Wakeshima. “There are more choices than ever before, but more choices that meet our criteria for acceptance without the baggage. We have higher expectations for food and beverages than ever, and manufacturers are listening and responding quickly.” So, how can convenience store operators best ride the beverage wave? For starters, by maintaining merchandising excitement. Because there are so many new beverages entering the market every day, it’s hard for consumers to navigate at retail, and Convenience Store News Ad.pdf 1 9/17/18 6:45 PM even harder for retailers to try and organize

The Resurgence, in Numbers Through the first six months of 2018, the overall packaged beverages category in U.S. convenience stores was up 2.7 percent in dollar sales and almost 1 percent in unit volume, after running flat to slightly down in both dollars and units during the first half of 2017. Energy drinks have reenergized the category, with both dollar-sales and unit-volume gains of more than 7 percent in the first half of 2018 (an improvement over the 2 percent sales and volume gains of a year ago). Enhanced water skyrocketed in the first six months of this year, increasing by about 11 percent in dollars and approximately 9 percent in units. Sports drinks registered nearly 6-percent growth in dollar sales and nearly 4-percent growth in unit volume in 2018’s first half. Source: Convenience Store News 2018 Midyear Report Card

beverages in a logical manner and keep up with the new products, Wakeshima said. “C-stores need to highlight and show their shoppers that they carry the newest beverages and variety. This means rotation of their offerings and supporting marketing materials in a reasonable time period,” he advised. Reaction time is key, agreed Fiondella. “As brands continue to innovate in the packaged beverage category, smart retailers are reacting by changing their assortment to reflect these new trends,” he said. “Carrying a large offering and allocating more cooler shelf space to these products in the strike-zone is translating into sales.” Education is another important factor for c-stores that want to stay on the crest. “People want to discover new things, but also want to be reassured that they’re making a good choice,” reasoned Wakeshima, noting that educating customers at retail, mobile and online to aid their selection process is now an expectation. “Becoming the retailer known for carrying the newest, innovative beverages is an opportunity, even if it’s in a smaller footprint.” C-stores are uniquely positioned to capitalize on today’s generational trends. “Focusing on shopper missions to communicate product benefits will be the key to their success,” predicted Fiondella. Additionally, utilizing profitable promotions like two-for and buy-one-get-one type deals, as well as food and drink bundling, will increase a c-store’s packaged beverage “take rate” and drive unit lift, according to Fiondella. Progressive convenience store retailers are shifting their

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

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focus from a packaged beverage category position to one that focuses more on need states, according to Don Stuart, managing partner of Cadent Consulting Group in Wilton, Conn. “Is it hydration? Energy? Indulgence? While retailers may still market by product section, it is critical that need states be addressed,” Stuart urged. “Need states is the biggest trend where we are seeing growth in water for hydration, both in terms of basic water and enhanced waters, such as with caffeine, increased alkalinity or flavor hints.” The sparkling water segment continues to “take the water world by storm,” Stuart added, as it boasts both hydration and mouthfeel/refreshment benefits. Continuing with his need-states observation, he said “sports drinks clearly address hydration under more intense conditions, and energy drinks are for a quick pick-me-up. We’ve also seen significant growth in more indulgent beverage needs, such as flavored coffees, as well as the cold brew arena.” Behind packaged beverages’ turnaround is a return to simplicity that enables consumers to know exactly what is in the products they’re purchasing, with simple labels, clean ingredients and/or functionaloriented benefits. Carbonated soft drinks are expected to continue their decline. “Savvy retailers will be staying on top of need-state trends and offering a broader array of clean, light, refreshing and specifically targeted products for beverage occasions,” concluded Stuart. CSN

Standouts in the Drinking Pool What are the top trends in packaged beverages these days? Portfolio Diversity All of the major beverage manufacturers have recognized that diversity in their offering is critical. Packaged beverage makers are meeting consumers’ needs with a portfolio of product types and brands that meet what consumers want at any given moment, according to Satoru Wakeshima, chief engagement officer at branding agency CBX. “Culturally, we’ve become so accustomed to having more choices than ever and, from a consumer’s standpoint, beverages are low-investment, low-commitment,” he said. “It’s not a major decision, and people like to try new things. In the next year, we’ll see more of what we’ve seen in 2017 and 2018, but with more blurring of product types, more hybrids.” Healthier Options Healthier SKUs will continue to be prevalent in the packaged beverage category. “While health isn’t necessarily a driver in beverage choice, we’re starting to see Gen Z consumers elevate ‘lack of unhealthy ingredients’ as a criteria in their selection process,” said Wakeshima. Many of the trends below are rising because of this. Bubbles Sans Sugar Flavored sparkling beverages continue to grow because they’re able to provide the fun and refreshment that comes from their effervescence without the guilt of sugar or artificial sweeteners, observed Wakeshima. “Lightly carbonated beverages provide greater drinkability, but offer a more interesting experience than still beverages.” “Greener” Drinks Plant-based protein continues to be touted as a healthier alternative to dairy. Thus, plant-based drinks are emerging as a popular subsegment in packaged beverages. Liquid Hybrids Pairing fruit juice with water or tea continues to be a way to offer the familiar flavor profiles people love, but with significantly lower calories than pure juice. According to Mintel, 47 percent of consumers say their ideal hybrid drinks would be low in sugar. “At the Natural Products Expo East last year, there were so many new beverages with similar offerings — all-natural, low-calorie, slightly fruity waters with added benefits,” reported Wakeshima. “These attributes have become table stakes in the hybrid beverage category. The standouts are the ones that actually taste good, not just ‘OK’ or ‘better than plain water.’ Our expectations are higher than ever and the bar continues to rise.”

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

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ALCOHOLIC BEVERAGES

Pouring Over Decisions Younger consumers are changing the how and why of purchasing alcoholic beverages By Melissa Kress examining the shopping behavior of younger generations and the effect on the retail industry. Now, as Generation Z comes of age and millennials continue to wield extraordinary spending power, convenience store retailers need to begin looking at their impact on the beer cave.

THERE ARE COUNTLESS STUDIES

“Attracting millennials into the alcoholic beverage category remains a priority for suppliers, distributors and retailers,” said Matthew Crompton, client director at Nielsen CGA, a joint venture between Nielsen and CGA Strategy. “From our latest On Premise User Survey, the results are clear in one thing: the millennial age group (21-35) is diverse in itself — with differences that marketers need to take note of, now.” Part of the problem facing the convenience channel is the tendency to pigeonhole all consumers in demographic buckets, without taking into account that not all consumers of similar ages think and act alike. For example, a 21-year-old college student is going to have very different motivations to enter the alcoholic beverage category compared to a 33-year-old father of young children.

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In Pooler, Ga.-based Pump-N-Go’s experience, the purchasing patterns do differ for younger alcohol buyers — especially those in more affluent areas — vs. older consumers. “Craft beer is certainly one of our most viable choices/ options for younger consumers,” said Yash Desai, president and chief operating officer of Stature Investments and owner of Pump-N-Go, a growing chain of convenience stores across southeast Georgia, currently with 15 locations. However, there are some similarities in the purchase results of younger adult consumers, too, according to Desai. “In general, millennials and Gen Z are much more interested in authenticity and making an informed purchasing decision. They will actually study the ingredients, read labels, etc., in the store; and, in fact, have probably read online consumer reviews at home to give them purchasing direction,” said Desai. “By the time they make it to the point of transaction, they believe the choice they’ve made is the best.”

Trouble Brewing? When it comes to Gen Z, it may not be what they are buying that should raise eyebrows, but rather what they are not buying. A report earlier this year from Berenberg Research found that members of Gen Z are not only drinking less alcohol than the generations before them as they grow older (64 percent of Gen Z respondents said that), but they also expect to drink alcohol less frequently than older generations currently do.

ALCOHOLIC BEVERAGES

Dubbing those born between 1995 and 2007 “the sober generation,” Mintel’s Caleb Bryant said these consumers are more pragmatic and responsible than older generations. In a blog post this spring, Bryant, senior drink analyst, cited research that attributes this to a childhood shaped by the threat of terrorism, mass shootings and political unrest. For example, 67 percent of iGens — what he refers to those born during that time period as — say they avoid unhealthy activities such as excessive drinking and smoking, compared to 56 percent of millennials, according to Mintel’s U.S. research on natural consumers. This presents a hard equation to solve: less consumers in the alcoholic beverage category, yet more players continually entering the space. “The challenge for both on- and off-premise retailers when it comes to selling the alcoholic beverage category is that competition is now no longer just the other bar/store/restaurant on your street — it is also the coffee shop, juice bar and even the gym,” Crompton of Nielsen CGA explained.

The On & Off Switch The most active on-premise consumers are 25- to 34-year-olds, with 49 percent stating they go out for a drinking occasion at least weekly. However, that number is down from 58 percent two years ago — raising concern for the alcoholic beverage category, noted Crompton. “More and more consumers in this age bracket are now using their on-premise visits for predominantly eating occasions as opposed to drinking ones,” he said. “The challenge for retailers is to ensure that their food-led strategy remains front of mind whilst offering a diverse and relevant drinks program to stand out from the crowd.” Younger millennials, those aged 21 to 24, pose “an interesting challenge,” Crompton said. Nielsen CGA research found that one in four consumers in this age group have not visited an on-premise establishment for a drinking occasion in the past three months.

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Taking Cues From On-Premise Replicating the experience on-premise establishments offer alcoholic beverage consumers may not always be possible for convenience store operators, but taking a look at what younger consumers are ordering on-premise may help c-stores find the right mix. Nielsen CGA’s latest on-premise data for the 52 weeks ended July 14 showed that beer is struggling among younger consumers. Specifically, beer declined by 1.9 percent. On the other hand, wine grew by 0.8 percent and spirits ticked up by 1.3 percent. These figures are for traditional on-premise spaces and do not include brew pubs or tap rooms, where beer does well, noted Matthew Crompton, client director at Nielsen CGA. “Spirits do particularly well [on-premise] due to the flexibility of the category across multiple dayparts,” he explained. “Gone are the days when a spirits occasion would be limited to the late-night market. The explosion of the brunch occasion has allowed spirits to take center stage during the day, with cocktails such as Bloody Marys and mimosas particularly driving growth.” The theatric element of spirits and cocktails appeal to consumers, with the best retailers and bartenders creating new, creative and exciting ways of presenting their drinks, he added.

“Attracting this consumer is particularly difficult due to their fickle nature and need for an ‘experience-led’ on-premise visit. This generation is one of the first age groups where it is almost cool to abstain from drinking alcohol — with the growth of mocktails, kombucha and other health-focused drinks testament to this,” Crompton explained. “This social media-inspired generation often needs instant gratification, meaning brands and retailers have to work extra hard to win this type of consumer over,” he added. When it comes to earning their alcoholic beverage dollar, experience is key. “The on-premise [channel] is perfectly positioned to make

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the most of this, as the best retailers will offer an experience that cannot be replicated at home,” said Crompton. “The ever-growing success and growth of brew pubs and tap rooms are a perfect example of this. The best brew pubs are often situated at the heart of a community; have passionate, knowledgeable staff who are similar to their customers; and an ever-changing selection of products, giving consumers something new and different on every visit.”

Don’t Be Left Out in the Cold That is not to say convenience stores can’t

compete with what on-premise has to offer. “C-stores can ensure they offer something different, too. We are already seeing this in ‘grocerants,’ which are providing a hybrid between the traditional on- and off-premise. Events such as in-store wine tastings or Meet the Brewer [events] would allow stores to create a buzz around certain categories and products,” Crompton offered. How Pump-N-Go will adjust to meet the changing dynamics in the alcoholic beverage category remains to be determined, according to Desai. At this point, he said its wholesalers are not yet providing additional help in the form of displays or marketing money to target the different demographics — at least not to any great extent. “With the 31 million 18- to 24-year olds, and the 21 million 13- to 17-year-olds coming up right behind them, this will certainly be on our radar as we move forward, though,” he said. “Gen Z is currently making an extraordinary impact on the American consumer economy.” CSN

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WINE

C-store Wine Grows Finer Convenience store retailers are upping their wine game in various ways By Renée M. Covino WINE HAS REACHED A HIGHER ELEVATION

in the con-

venience channel. With the majority of states now allowing wine sales in convenience stores, more c-store retailers are realizing the benefits of offering another alcoholic option besides beer — and not just bargain wines, but premium varieties and brands as well. As a result, convenience channel wine sales are growing finer, too, as customers are embracing the offering and trading up to the more premium varietals and higher price points they’re finding in their neighborhood c-stores.

In Private 7-Eleven Inc. has long been a c-store industry pur-

veyor of wine, including private-label wines. In 2009, the chain introduced its first private-label wine brand, Yosemite Road, which is still available today in chardonnay, pinot grigio, moscato, pink moscato and cabernet sauvignon blends. Last October, 7-Eleven upped its vino offering by introducing the Trojan Horse label, debuting a chardonnay and a pinot grigio with a suggested retail price of $6.99 (750 milliliter). The two Trojan Horse whites were the first 7-Eleven private-brand wines to carry vintage dating and California appellations, designating that all the grapes were grown in California and harvested the same year. They also feature a Stelvin closure, which is a type of screw that is easy to open and preserves freshness. More recently, in June, the convenience giant unveiled its Voyager Point label. Debut varietals include a cabernet sauvignon and a red blend from California, and a sauvignon blanc from the Marlborough region of New Zealand — all with a suggested retail price of $9.99 for a 750ml bottle. The “bold and modern” bottle label for Voyager Point was designed to appeal to millennial wine drinkers. And, like the Trojan Horse brand, Voyager Point bottles come with a Stelvin closure. “As the world’s largest convenience retailer, 7-Eleven has a vast customer base. Pricing wines at different price points allows every customer to find the perfect wine for them,” explained Tim Cogil, senior director of private brands at 7-Eleven. The retailer has observed that wine drinkers are increasingly willing to pay a few extra dollars to move up to higher-quality, higher-price-point wines. So, the chain’s strategy behind Voyager Point is to give wine lovers “the ability to trade up in quality at an affordable price, allowing them to explore the world one premium vintage at a time,” according to Cogil. The goal is also to provide a better-quality wine than the top national brands. “As customer preferences shift toward quick and convenient services, we would like to continue to provide our customers with what they want, when and how they want it. In terms of wine, that means providing quality wines at reasonable prices for the increasingly on-the-go customer,” noted Cogil. He told Convenience Store News that 7-Eleven merchandises its wine assortment

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WINE

to align with each varietal. “White, blush and sparkling options are available chilled in the refrigerated section, while those same options, along with red wine, are available on an ambient display,” he shared. The stores also merchandise affinity items like wine accessories — gift bags, corkscrews and more — adjacent to the wine section to “simplify the wine shopping experience.” Irving, Texas-based 7-Eleven operates, franchises and/or licenses more than 67,000 stores in 17 countries, including 11,800 in North America.

“As the world’s largest convenience retailer, 7-Eleven has a vast customer base. Pricing wines at different price points allows every customer to find the perfect wine for them.” — Tim Cogil, 7-Eleven Inc.

Grape Events Assortment isn’t the only avenue for c-store retailers seeking to elevate their vino image. This spring, Rutter’s began hosting a series of wine and food pairing events. The York, Pa.-based convenience store chain partnered with E&J Gallo Winery, as well as local wineries, to offer a variety of samples at each event. For the first five pairing events, Rutter’s and Gallo offered wines such as Apothie Red and Rose, Ecco Domani Pinot Grigio, Liberty Creek

Heard It Through the Grapevine What are some of the best wine trends for convenience stores to aspire to? Looking for ideas to up your wine game? Consider these seven trends of late: 1. Digital platform technology. More and more wine stores are “white labeling” the technology end of wine merchandising, utilizing third-party digital platforms for delivery and data collection, which feed directly into marketing efforts. By doing so, stores can track birthdays, shopping preferences, purchase history, holidays and more for experiences and pop-up events, according to Rohan Duggal, owner of Columbia Wine Co. in New York and founder of EpiFruit, a market-based, on-demand wine delivery platform. 2. Classroom events. Beyond tasting events, Duggal is seeing more classroom events, which create an ambiance that is built outside the traditional shopping experience. 3. Hire up. Hiring a public relations person externally or internally to facilitate wine merchandising and marketing events is another trend that Duggal believes convenience stores can aspire to on the wine ladder. 4. Streamlined merchandising. As the adult wine audience gets younger, the store set will have to evolve to an easier approach to buying wine with less SKUs and more organization built on usage vs. the traditional setup by region, said Duggal. 5. Private label. Cadent Consulting Group predicts significant growth in private-label wines beyond the original Two Buck Chuck. “The difference between a new label from a small vineyard and a private label is difficult to discern. Private label can build a real brand in the age of wine exploration and product proliferation,” explained Don Stuart, managing director of Cadent Consulting Group. 6. Journey-based strategy. The theory is that while a great wine may be hard to find, the journey is almost as much fun as the destination. Retailers can embrace this journey by creating events around local wineries, social gatherings and tastings with pairings of cheese, crackers and other foods, as well as rotations of wines of the week, said Stuart. The best wine of the week over the course of a month can then be added for permanent placement based on social media or other shopper feedback, he advised. Another suggestion: aim for Friday night wine pairings. They’re a great way to kick off the weekend, attract stock-up shoppers and create a meaningful destination event. 7. Low- or no-sugar wines. Target the female wine shopper and/or the millennial shopper with wines that are lower in sugar content. Also, tout organic labels, low carbs, etc., advises Tawnya Sutherland, a retail industry consultant and blogger. She told CSNews that these hard-to-find “diet” wines could help c-stores carve out a niche in the wine market.

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WINE

Chardonnay, and Barefoot wines. Additionally, Rutter’s arranged for food and candy pairings for each wine, including shrimp, ribs, chicken, cheese, chocolate chip muffins, strawberry cheesecake, Kit-Kats and Starbursts. Rutter’s Vice President of Marketing Robert Perkins said the events are a great way to elevate wine and tie in key vendors. The retailer currently has 18 locations with wine. It operates more than 70 stores overall in central Pennsylvania and West Virginia.

profile through a local angle — Lancaster, Pa.-based Turkey Hill Minit Markets broke ground by featuring Pennsylvania wines at its first convenience store, in Allentown last fall. That offering then branched out to other select Turkey Hill stores in the Keystone State. The company operates more than 270 stores in Pennsylvania, Indiana and Ohio. CSN

While 7-Eleven does not currently conduct wine events, “we do understand the opportunity that exists,” Cogil told CSNews. “We experience shifts within our customer preferences during different times of the year, such as white and blush wines in summer, and red and sparkling wines in the winter, which poses a great opportunity for us to capitalize on those customer buying patterns via event-driven merchandising.”

7-Eleven’s newest private-label wine brand, Voyager Point, was designed to appeal to millennial wine drinkers.

He added that the chain does have plans to execute wine events in the future, “with the focus on building customer awareness and driving trial of our expansive wine assortment, including our private-brand offerings.” Other convenience store chains are raising up their wine

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Making Confectionery Shopping an Experience C-store category experts weigh in on the best merchandising and promotional strategies By Danielle Romano LIKE ALL THINGS RETAIL THESE DAYS, the confectionery shopping experience is in flux. New technology and the rise of e-commerce is shifting the way shoppers behave, as they’re now looking for a more experiential confectionery shopping experience.

“The in-store experience now has to offer a holistic approach that incorporates this shift and creates a cohesive shopping experience. This can come to life in a lot of ways for retailers,” said Jim Dodge, vice president of convenience at Mars Wrigley Confectionery U.S. For example, although it’s still a highly impulsive category, there is an opportunity to help products become planned purchases, making it from the aisle to the basket by connecting online communications with those in stores, Dodge explained. “This is done by matching external promotions, such as web banners, with the internal merchandising experience,” he said. Millennials are the driving force behind the confectionery shopping shift, and this generation is embracing the small format of the convenience channel now more than ever. C-stores stocking unique flavors, textures and pack types are helping meet the needs of this generation.

“In addition to product mix, incorporating unique fixtures and signage is improving the c-store experience and increasing shopper engagement with the category,” McLane Co. Inc. Confection Category Manager Kraig Morrison advised. “New technology and increased services are also evolving the shopper experience. For example, e-commerce and delivery are a couple of the future driving forces of the c-store shopping experience.” As consumers’ confectionery shopping expectations continue to evolve, it’s becoming increasingly important for c-store retailers to provide a seamless, integrated experience. Here are four recommendations from confectionery category experts on how to win more sales:

Merchandising The best planograming strategy for confection places the top-performing items and brands in the area of the set with the highest visual penetration rate, also known as the “strike zone.” Positioning top items within the strike zone not only optimizes the placement of the best items in the set, but it also allows for king and standard pack types to be blocked separately, making the aisle more shoppable, according to Morrison. “Grouping pack types helps to put king-size, standard and non-chocolate in their own prominent locations. With 32 percent of consumers only looking for king and 29 percent only looking for standard, creating their own blocks allows the planogram to cater to each customer’s need state,” he said. Mars Wrigley Confectionery recently conducted a global, multi-month survey to understand what influences shopper purchasing decisions and developed a few key strategies: • Carry a balanced assortment of gum, mints, fruity confections and chocolate to meet the shoppers’ needs and drive sales. • Reorganize products based on what motivates shoppers to purchase certain items. For example, pack type is the top purchase driver for fruity confections, while brand name is the top purchase driver for chocolate. The candy aisle has traditionally been where shoppers seek confection, and 64 percent of confection purchases still originate from this primary location. However, the candy aisle has earned a

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reputation as being one of the most difficult areas of the store to shop. “Optimizing the candy aisle and arranging the planogram to place the products the shopper most often seeks in the ‘strike zone’ can decrease product search time by 50 percent and yield a 4-percent to 6-percent increase in sales,” noted Alan Tobin, director of category management, convenience channel, at The Hershey Co. This strategy ensures that the strike zone is reserved for only the very best items, which should include all sizes. Getting the merchandising strategy right in the primary location is key to success in the confectionery category. “If shoppers are unable to locate an item they desire immediately, they will walk away from the category completely,” Tobin acknowledged. Core-Mark International Inc.’s Michael Caporusso, director of marketing and category management, shared a similar sentiment: “One of the barriers to the category is wrong pricing and another is if the candy aisle has low visibility, so prioritize the placement of products.” However, retailers must also be cognizant that the candy category is driven by brand and innovation. “Shoppers are looking for specific brands, but they’re also looking to indulge in what they haven’t eaten before,” said Caporusso. “It’s a contradictory experience, but for a c-store retailer to provide convenience, you have to have both experiences.”

Signage The average time spent in a convenience store is only 2 minutes and 42 seconds. And of this short period of time, only 18 seconds are spent in-aisle.

“Signage helps the shopper navigate the store and directs the shopper through the aisle to make the most of this valuable time. Good examples are window and pumptopper signage to help drive shoppers into the store,” said Morrison. Mars Wrigley Confectionery’s Dodge agrees with this strategy and recommends retailers leverage a mix of in-store and out-of-store signage by advertising power brands on the lot during key holidays and leveraging pumptoppers and gas TV ads to promote high-margin basket builder categories, like confection.

Promotions Promotional effectiveness is becoming more of a musthave to generate gains year over year. The anticipated lift in sales that the “right price” will trigger, combined with the successful application of marketing, has to accomplish the goal of producing more net profit at the reduced price for the period of time. According to McLane’s Morrison, two-for pricing is one of the most successful drivers in candy, leading to the “win-win-win result.” “The shopper recognizes the value of a 2/$2 or 2/$3 offer for multiple products and, at the same time, the retailer and the manufacturer are gaining sales and penny profit gains with the larger basket rings,” he said, adding that fountain drink bundling is another successful driver.

Last Interruptions Aside from the candy aisle, counter unit displays, under the counter and queue lines are critical secondary purchase points for confectionery, as shoppers approach the pay point from these different vantage points. It’s important for c-stores to maximize checkout given the brief time customers spend in the store. With that in mind, Dodge has these three final tips for c-store operators: • Redesign the checkout by using large-footprint and ground-up builds, as well as register toppers that feature power categories and power brands. • Make sure products are easy to shop and well organized around the checkout. If shoppers can easily locate impulse products, they are more likely to add them to their basket. • Provide a variety of product choices to satisfy different shoppers’ end-of-trip needs. CSN

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Capitalizing on the Modern-Day ‘Healthy Halo’ From high protein to non-GMO, healthy snacking means many different things to consumers By Danielle Romano GONE ARE THE DAYS of

a one-sided definition of “healthy.” Today, healthy can mean many different things to different consumers, like high protein, gluten free, keto, paleo, vegan, organic, local, fresh, all-natural, free from artificial ingredients, preservative free, and non-GMO. As health and wellness takes on a larger role in consumers’ day-to-day lives, their snack choices are evolving to match their lifestyle needs. In fact, 41 percent of consumers want snacks to provide an energy boost, while 80 percent are willing to pay more for snacks with health attributes, according to The Hartman Group’s The Future of Snacking study.

“In terms of pre-packaged snacks, you see a lot of different need states represented in different ways than in the past,” said Betsy Frost, director of platform marketing innovation at General Mills Convenience. “‘Healthy’ snacking was for a time about low-calorie options, where you often traded taste or texture of the ‘real thing’ for a lower calorie option or portion-controlled 100-calorie pack. Now, we see healthy snacking mirror the core values of the consumers.” As shoppers seek out brands that align with how they see themselves, more and more healthy snack brands are emerging in the packaged snacks categories. Three macro trends that are driving this, according to Minneapolis-based General Mills Convenience, are:

• The changing of food values. Consumers are looking for more real food experiences. • Consumers’ changing eating habits. “People snack more throughout the day and are looking for snacks to do more “We’ve seen changes in the industry as cerjobs for them than they have in the past, such as a meal tain fads have come and gone, [but] we are replacement or mini-meal, a before- or after-workout supalso seeing a trend that consumers are willplement, or a mental or energy boost,” Frost explained. ing to spend more money on great-tasting, • The boom of the food entrepreneur. “With more snacks high-quality, healthy snacks, and manufacbeing in more non-traditional outlets, food entrepreneurs turers are filling that demand,” said Paige have found it easier to turn a home hack that served their Brown, director of marketing at Stryve personal needs into thriving, purpose-driven organizaBiltong Snacks, a maker of meat snacks. tions,” she added. Just as today’s definition of healthy continues to evolve, so does the demographics of Kirk Bailey, product director of grocery and snacks at conthe healthy snack consumer. Healthy eating venience distributor McLane Co. Inc., identifies an additional trend he finds to be relevant to the topic: an increase in the is becoming the new norm for men and amount of awareness of how someone’s diet can directly women, both young and old, as they grow more mindful of nutrition and the correlate with their health. role it plays in their everyday lives. “As these health-conscious consumers become more educated on how to live a healthy lifestyle, they will continue to However, if there is one seek items that have simple ingredients and attributes that thing that rings true across have a positive effect on their health vs. just grabbing anyhealthy snack consumthing to hold them over until their next meal,” said Bailey. ers, it is that they’ll flex different food values at different occasions. Building Up a Reputation Amid this continuing shift, convenience store retailers shouldn’t miss out on the opportunity to serve healthy snack consumers — across all of their varied need states. C-store operators that amp up their healthier snack offerings and make an effort to create awareness and promote these options will have the most success, according to Kelly Fulford, North Zone manager at General Mills Convenience.

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“C-stores are generally known to be a good place to satisfy a sweet or savory indulgent craving or impulse, but may not have the same reputation when it comes to the other snacking need states,” Frost added. “There are also consumers who clearly live their food values all the time and for them, it is important to know that c-stores carry options that fit into their lifestyle.”

“Healthy or better-for-you items are important, but are more niche, so retailers should not immediately expect to see the same turns.” — Kelly Fulford, General Mills Convenience So, what’s the best way for c-store retailers to offer healthier snacks to their customers? McLane’s Bailey suggests they incorporate a small section within their salty snack set that includes six to nine items that are in a highly visible area of the set, such as the top right corner. Then, if retailers find these items do well for their stores, they should consider expanding to a three-foot “Better-forYou” endcap, preferably in a prime location within the store that lets customers know these healthier items are available.

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A Meaty Segment Meat snacks continue to grow thanks to shifting demographics and format innovation Much has been written in recent years about the rising popularity of snacking, as more time-pressed consumers opt to replace regular, full meals with on-the-go snacking. In their quest for satiating options, these consumers have sought better-for-you snacks that boast healthful benefits, like meat snacks, which promise high protein and, often, all-natural ingredients.

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In 2017, meat snacks was No. 1 in the alternative snacks category in terms of dollar sales growth, rising 3.5 percent in sales per store year over year, according to the 2018 Convenience Store News Industry Report. A recent report from Mintel also revealed that meat snacks account for 30 percent of market share in the snacks category and is the fastest-growing segment, with sales rising 45 percent over the past year to reach $3.6 billion. Format innovation is one of the factors behind the segment’s meaty performance, especially with the recent introduction of meat bars. New flavor profiles are important, too, noted Kirk Bailey, product director of grocery and snacks at McLane Co. Inc. Flavor profiles such as sweet and hot, barbecue and Cajun are driving meat snack sales, he observed. Another factor propelling meat snacks is a better understanding of who today’s meat snack consumer is. Once considered a segment dominated by Bubba, there is a shift taking place as meat snacks are now finding appeal across multiple demographics.

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“Young males are getting older and, as such, a number of meat snack brands will introduce different products to meet them at each stage of life. For example, satisfy their needs with a core product in their younger years before moving them on to more premium offerings as they enter adulthood,” Weber explained. “You can’t ladder people up, but it’s not a bad strategy when you think about it.” Female consumers are also a chief part of the shift that’s taking place.

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“Women are big meat snack consumers because it’s a simple way for them to sneak more protein into their diet,” said Paige Brown, director of marketing for Stryve Biltong Snacks. “They’re the reason you’re starting to see healthier options and fancier flavor profiles among the category.” To further boost sales of meat snacks, Brown suggests convenience stores use marketing materials that call out high protein. She also believes in having secondary placement of meat snacks on an endcap around other better-for-you items, like bottled water.

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McLane’s Bailey agrees: “Signage, promotions, in-store displays and bundles when available are a great way to drive sales in the c-store channel,” he said.

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For Stryve Biltong’s Brown, a few key practices c-store retailers should exercise are: • Choosing items that are in demand; • Choosing items that are packaged in a modern way that steals attention from the shelf; and • Choosing items that are expected to be trending in a year from now, “so that when the wave of demand comes, you’ll be ready for it rather than trying to catch up with it.”

While c-stores need to stock a wide variety of options across key healthier categories, Fulford cautions that the benchmarks for performance with these items should be different than the expectations retailers have for mainstream items. “Healthy or better-for-you items are important, but are more niche, so retailers should not immediately expect to see the same turns,” she said. “It takes a bit of patience and also takes working with manufacturers who are broadly marketing and promoting the products in the right way.” CSN

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Tunnel Vision As more c-store car washes trend toward tunnel service, here are four key questions to ask By Renée M. Covino IN THE CASE OF THE CAR WASH BUSINESS, tunnel vision can be a good thing. The trend of late is convenience stores opting to install the more expensive tunnel wash vs. the industry-standard in-bay automatic (rollover) wash.

Consider The Spinx Co., the convenience store chain based in Greenville, S.C., which opened its first express tunnel car wash, the Ride ‘N’ Shine tunnel wash, to coincide with a new store opening in February. Each Ride ‘N’ Shine wash features an environmentally-conscious water reclamation system and eco-friendly chemicals. Spinx’s Ride ‘N’ Shine tunnel wash also boasts advanced technology. The system uses a 3-D scan of each vehicle to precisely target soap and high-pressure water based on the vehicle’s size and shape for the most accurate clean. The tunnel wash is equipped with specially engineered blowers, too, that are said to achieve a drier vehicle while conserving energy. “While all car washes may appear to be the same, our new tunnel wash sets us apart from the competition, and our trained staff and high-tech equipment will deliver a great experience and quick, thorough car washes to our

customers,” said Stewart Spinks, founder and chairman of The Spinx Co. operator of more than 80 c-stores. The retailer plans to open many more tunnel washes at its stores (46 locations currently include a car wash). Spinks said the company will continue to measure “the car wash element” and evaluate what impact it has on the retailer’s overall offer. With a focus on growth in the Charleston area for the next two years, Spinks believes the car wash element is definitely going to help diversify its offer, so the retailer is not so dependent on petroleum profitability and its contribution, as it has been historically. Earlier this year, Jacksonville, Fla.-based Gate Petroleum Co. — which also operates car washes at many of its convenience stores — unveiled its first location in the standalone car wash business, under the banner of Gate Express Carwash. Located in Jacksonville, the site features a 125-foot tunnel system that can wash a car in less than four minutes. Gate Petroleum, which operates and/or supplies fuel for nearly 200 locations in Florida, Georgia, North Carolina and South Carolina, is reportedly positioning standalone car washes near its Gate convenience stores and gas stations. The chain is looking to lead in car wash development as other express-wash competitors enter the market. Like Spinx and Gate, CEFCO Convenience Stores is yet another c-store operator in the car wash business that recently went more premium with a tunnel system. The Temple, Texas-based chain with 225 stores aims to bring more of a “wow” factor to its car wash customers by way of a waterfall foam feature and high-pressure cleaning for tires and rims.

Are You Next? For those convenience store operators already in the car wash business, or those looking to get into it, here are four key questions to ask to determine if a tunnel car wash is the best type of wash system for your operation: 1. Do You Have the Space? Whether it’s an upgrade or a new-build, tunnel car wash systems require more physical space than in-bay automatics. For instance, the MacNeil EDGE, a bundled solution from National Carwash Solutions, is an all-inone tunnel program with express tunnels that range from 85 feet in length to 150 feet. Many c-stores looking to upgrade allow for at least 100 feet. In the case of the MacNeil EDGE, other specifications include a 112 Convenience Store News C S N E W S . c o m

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minimum of 16 feet in tunnel width and a minimum of 12 feet in tunnel height. Electrical specs are between 208 and 460 volts; water specs are 100.9 gallons per minute. 2. What Are Your Goals? Getting a leg up on the competition and being first to market were driving factors for both Spinx and Gate Petroleum. However, it’s good to go beyond that — as they did — with a clear vision of benefits. In the case of CEFCO, the intent was also to have more satisfied customers, but with reduced labor costs. With the upgraded system, all that its staff has to do manually is clean the inside. Based on initial results, sales and profitability are up in the car wash — with an added bonus of increased inside store sales. 3. Are You Ready to Do the (Proper) Math? The most common call that car wash equipment supplier Sonny’s Enterprises Inc. gets from c-store operators is asking how can they upgrade and make their car wash more profitable. Sonny’s cautions that car-washing success does not necessarily follow the volume of gasoline sold or the amount of inside store sales. “Car

washing potential requires a significant amount of due diligence not as simple as ‘we sell 250,000 gallons of fuel a month, so we should sell X amount of car washes per month,’” said Kevin Collette, vice president of sales at Sonny’s, based in Tamarac, Fla. To properly analyze, many factors must be evaluated, such as traffic, traffic patterns, demographics, car washing competition, and then the physical attributes of the site itself. “Once a c-store operator understands these critical criteria and teams with an experienced car wash professional, the wash could then be converted or designed to maximize the site’s true car washing potential,” Collette explained. 4. Can You Maintain Customer Loyalty? Once you attract customers with an upgraded car wash, you have to keep them. The best wash services today go hand-in-hand with a loyalty program.

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The most attractive ones are designed around “unlimited wash” programs/clubs that allow customers to wash their cars as many times as they desire for a monthly subscription fee. Typically, these programs are sold at three to four times the cost of the base wash price, according to Collette. For example, if the base wash is $5, the monthly subscription is $19.95.

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The billing is done monthly via a credit card. Premium packages naturally are priced higher. Upgrades are also typically made available when the club member approaches the point-of-sale. “RFID identifies the member and offers upgrades, such as tire shiner and high-quality conditioners, creating an average ticket typically well above the base cost,” noted Collette. CSN

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FEATURE

INVESTING IN THE FUTURE

Our 2018 Technology Study shows self-checkout and biometric payment are on convenience retailer agendas this year By Chelsea Regan nearly every aspect of convenience retailing these days, investing in more advanced technologies as a means to bolster one’s business is a no-brainer.

WITH TECHNOLOGY TOUCHING

Convenience Store News’ 2018 Technology Study finds that convenience store retailers are once again committed this year to spending more money on technology to better serve their customers and their bottom line. Nearly 62 percent of retailers surveyed planned to make a greater investment in 2018, compared to 2017. Roughly 28 percent expected to spend the same, while just around 10 percent

2018 Technology Investment Company will spend more in 2018

Company will spend less in 2018

Company will spend same amount

61.8%

Promotional/Sales Technology Social media Video monitors in-store Automated loyalty programs Mobile apps GPS/geolocation Email marketing Text messaging to customers

The biggest jump in the rankings this year was seen in becoming EMV compliant at the pump — rising four spots from No. 12 in importance in 2017 to No. 8 in importance this year. On the other hand, respondents seem less concerned about getting electronic car charging stations at their sites, with only 6.8 percent looking to tackle that enhancement this year, down from 13.3 percent in 2017.

Also continuing its stable trend as of late is how retailers are spending considerably more money on store-level technology than they are on technology for their headquarters. In the past year, 68.8 percent of retailers’ technology investment went to bolstering technology at their stores, while 31.2 percent was set aside for HQ operations.

Source: Convenience Store News Market Research

Any promotional sales/technology (net)

The five goals c-store retailers have top-of-mind to accomplish in 2018 remain unchanged from 2017. Topping the list is better management at the store level in terms of inventory and revenue, followed by replacing aging point-of-sale (POS) systems, reducing theft and shrink, speeding up the customer checkout process, and better management of store labor expenses.

When asked where they allocated their technology dollars in the past year, 93.5 percent of retailers indicated they spent in the automation space, a slight increase over the previous year.

28.5%

9.7%

predicted less money would go toward tech this year.

IMPLEMENTED

PLAN TO ADD

82.4% 68.9% 63.4% 53.6% 52.9% 44.6% 43.7% 42.6%

61.2% 12.6% 24.0% 25.2% 24.5% 28.4% 26.0% 36.2%

Source: Convenience Store News Market Research

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

As c-store retailers are constantly thinking about how to most efficiently spend money on technological improvements at their stores, they’re also thinking about how their customers can most efficiently spend their money with them when they shop. That’s why 47.7 percent of survey respondents said they want to replace their POS system this year. Perhaps more interesting than what retailers have implemented to date is what they plan to add in the near future — specifically, self-checkout and biometric payment technology. This eagerness to provide a frictionless checkout experience comes on the heels of e-retailing monolith Amazon ushering its cashierless Amazon Go store with “just walk out” technology into the mainstream. Sponsored by

FEATURE

Only 8.4 percent of respondents say they’ve already added the convenience of a self-checkout solution to their stores, but a whopping 48.3 percent plan to add this convenience in the near future. As for biometric payment technology, 51 percent of respondents have their sights set on adding the capability; something that only 6.6 percent of c-store retailers currently provide. At the pump, retailers’ priorities differ slightly. Top of mind is boosting acceptance of various mobile payment options (cited by 38.5 percent of respondents) and imple-

Payment Systems IMPLEMENTED

PLAN TO ADD

100.0% 74.2% 68.3% 56.7% 41.6% 24.6% 8.4% 6.6%

0.0% 15.6% 21.4% 21.9% 26.5% 23.0% 48.3% 51.0%

95.7% 50.9% 35.9% 44.2% 10.3% 18.7%

0.9% 18.9% 38.5% 22.8% 9.3% 38.5%

IN-STORE:

Credit/debit Prepaid/stored value card Electronic benefits transfer (EBT) Electronic check verification Mobile payment (Apple Pay, Google Pay, etc.) RFID Self-checkout Biometric payment technology AT PUMP:

Credit Prepaid/stored value card Mobile payment Partial debit authorization RFID Cash acceptors Source: Convenience Store News Market Research

Social Media Have you incorporated social media into your company’s marketing plans? Yes

CURRENT

24.0%

YEAR AGO

26.7% 76.0%

Source: Convenience Store News Market Research

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

73.3%

menting cash acceptors (38.5 percent). Inside the store, mobile payment of the likes of Apple Pay and Google Pay has been implemented by 41.6 percent of retailers.

Marketing Moves At an increasing pace, c-store retailers are turning to technology to enhance their marketing and promotions and ultimately improve their sales. Over the years, they’ve funneled resources into social media (68.9 percent currently using), in-store video monitors (63.4 percent using), automated loyalty programs (53.6 percent), mobile apps (52.9 percent), GPS and geolocation technologies (44.6 percent) and email marketing (43.7 percent). Text messaging customers through SMS technology is something that 42.6 percent of retailers already provide, but it’s also the capability that the highest percentage of retailers (36.2 percent) indicate they are planning to add in the near future. There are also marketing technology dollars to be spent at the pump, where retailers are eager to convert fuel-only customers to fuel-plus customers. More than 46 percent have video monitors at the pump, with 27.6 percent planning to implement the technology. And 31.7 percent of retailers want to join the 38.3 percent who have advertising and couponing at the pump. The next wave of marketing technology implementation is likely to see more retailers looking to catch up to the 3.3 percent who already enable merchandise ordering at the pump, as 35.5 percent of respondents indicate they plan to follow suit. With social media claiming the top spot in terms of the percentage of retailers utilizing the platforms in service of their sales and marketing goals, this year’s CSNews Technology Study delves deeper into how that usage breaks down. Of the 76 percent of survey respondents who currently incorporate social media into their marketing plans, 100 percent are on Facebook. Twitter remains firmly in the No. 2 spot, with 66.3 percent of surveyed retailers having accounts on the platform. Compared to a year ago, it’s Instagram that has seen the greatest boost in retailer usage, jumping from 40.2 percent up to 54.6 percent of retailers using the platform. On the flip side, enthusiasm appears to be waning for Pinterest (down to 10.4 percent using vs. 18.6 percent last year) and Foursquare (down to 8.8 percent using vs. 15.8 percent in 2017). What are c-store retailers using social networks to get the word out about? Ninety-two percent are utilizing them for promotions, followed by events (83.3 percent) and contests (72.5 percent). While new products featured more prominently in retailers’ social media strategies a year ago, fewer are

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FEATURE

Loyalty Programs CURRENT

YEAR AGO

Does your company offer a loyalty program?

Yes No

using the platforms for that today (43.5 percent vs. 66.7 percent last year). Polling consumers, daily specials and purchase history summary also rank.

Loyalty Technology At the time the 2018 CSNews Technology Study was conducted, 54.4 percent of responding retailers said they offered a loyalty program — which, interestingly, is down roughly 3 points from last year. Of these retailers, 64.3 percent have a points- or rewards-based program, 7.1 percent have a credit card or other payment option, while 28.6 percent provide both for their customers.

54.4% 45.6%

57.3% 42.7%

64.3% 7.1% 28.6%

66.9% 6.1% 27.0%

48.3% 30.8% 20.9%

48.3% 26.9% 24.8%

Description of loyalty program

Point/reward-based Credit card/payment option Both Type of loyalty program

Proprietary Tied to a major oil brand Both Source: Convenience Store News Market Research

Most retailers’ loyalty programs are proprietary (48.3 percent), whereas 30.8 percent opt to tie their program to a major oil brand and 20.9 percent take advantage of both options. Along with engaging shoppers through loyalty programs, many retailers are looking to cement that connection through mobile apps. Currently, 46.2 percent have a mobile app for consumers — up roughly five points over last year. All surveyed retailers’ mobile apps provide the basic function of a store locator. And over the past year, most other popular mobile app features have held steady in their percentages: fuel prices (62.9 percent have), coupons (61.7 percent), limited-time specials (54.1 percent), customer feedback (53 percent) and loyalty program tie-in (49.7 percent). The biggest movement in terms of mobile-app features goes to games. While sitting lower on the list at 27.5 percent, that’s up from 18.2 percent a year ago. Other app features tracking with respondents are made-to-order foodservice, online ordering, pump pre-pay and self-checkout, which as aforementioned is gaining considerable steam in the c-store space.

EMV & Beyond No report on technology in the convenience and fuel retailing industry would be complete without the mention of EMV compliance, both in-store and at the forecourt. Compared to a year ago, EMV compliance at the point-ofsale is up by nearly 10 points, climbing from 67.7 percent compliant to 76.4 percent. Only 7.1 percent of responding retailers say they’ve yet to start the process of becoming EMV compliant at the POS. At the pump, significantly fewer retailers have reached complete EMV compliance (27.6 percent have). However, most retailers have at least started the process of becoming compliant here (56 percent) vs. only 16 percent that have yet to begin tackling it. Looking ahead, technology is poised to become an even more central part of doing business in the c-store and fuel retailing space. From the role it plays in security, to the increasing opportunities it presents to up the “convenience” factor in the retail segment that bears its name, technology advances are both an imperative and a way to separate from the competition. CSN

Mobile Apps Does your company have a mobile app for consumers? CURRENT

YEAR AGO

Yes 46.2%

Yes 41.4%

No 53.8%

No 58.6%

Source: Convenience Store News Market Research

Mobile App Features CURRENT

Store locator Fuel prices Coupons Limited-time specials Customer feedback Loyalty program tie-in Games

YEAR AGO

100.0% 58.8% 57.6% 54.5% 53.4% 52.3% 18.2%

Source: Convenience Store News Market Research

EMV Compliance CURRENT

YEAR AGO

Is your company EMV-compliant at the POS?

Yes No, but we have started the process No, and we have not started yet

76.4% 16.5% 7.1%

67.7% 19.4% 12.9%

Is your company EMV-compliant at the pump?

Yes No, but we have started the process No, and we have not started yet Source: Convenience Store News Market Research

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

100.0% 62.9% 61.7% 54.1% 53.0% 49.7% 27.5%

27.6% 56.0% 16.4%

31.8% 42.8% 25.4%

FEATURE

VISIONS CONCEIVED & ACHIEVED The winners of this year’s Convenience Store News Store Design Contest balance distinctive looks with improved functionality By Angela Hanson WHEN LOOKING AT AN OLDER convenience store in need of a refresh, it

is often easier to determine what doesn’t work than to set the vision for what it needs to become. Even new builds grapple with the same questions: What aesthetic will best convey the theme of the brand? What will be most attractive to customers? How should the layout be set to facilitate foot traffic and work within the confines of the space? What’s the best equipment to purchase? What’s the budget for all of the above? The winners of the 2018 Convenience Store News Store Design Contest worked hard to answer these questions, and their results are clear. They conceived a vision and achieved it. Now in its 13th year, the annual awards program honors new and rebuilt c-stores whose designs excel in areas such as interior layout, use and effectiveness of signage and logos, and exterior property and landscaping. Store construction or remodeling must have taken place between January 2017 and March 2018. Judging was based on innovation, creativity and the positive impact of the overall design and/or remodel on the business. Many of the winning stores combine the latest technology with regionspecific designs, meeting customers’ needs in atmospheres where they can also enjoy spending time. This year’s honorees are:

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

FEATURE

BEST ORIGINAL DESIGN: Blue Goose Market, Oswego, Ore. Designers: Paragon Solutions, Architecture Northwest P.C. THE STATE OF OREGON is known for its natural

beauty. Chris Davies, principal at Blue Goose Investment LLC, had a vision for a brand and image that would embody that sense of nature’s beauty. “It starts with the name, but the story is completed as the customer steps into the store and is surrounded by unexpected warmth, freshness and friendliness that is uniquely Blue Goose,” according to designer Paragon Solutions. The new 3,776-square-foot convenience store marked a considerable upgrade from the former 2,460-square-foot, threebay service building with snack shop that previously occupied the site. The new store’s layout is designed to balance maximum store size with unimpeded traffic flow and plentiful customer parking. The store’s entry is purposely placed to face the street corner in order to provide an airy, open interior. In a unique touch, the store provides a dish of water and hooks to attach dog leashes while their owners shop inside. The use of warm, natural woods and cool blue colors in the store’s interior is meant to welcome customers to a special Oregon experience. The combination of high-end, custom wine displays and exposed wood ceilings adds a contrasting industrial flair, while the large, uncluttered floor space with custom graphics for each area streamlines the shopping experience. The use of stone on both interior and exterior walls completes the store’s natural Oregon feel. The 13 cooler doors, two freezer doors, walkin beer cave and large, open-face cooler make it easy for customers to pick up graband-go food and beverages, while craft brew fans can visit the growler filling station that offers both microbrews and ciders on tap.

The use of warm, natural woods and cool blue colors helps Blue Goose Market achieve its mission to embody the natural beauty of Oregon.

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

FEATURE

BEST SKY’S THE LIMIT REMODEL: Fresh to Go, Chicago Designer: Paragon Solutions THE PRIMARY CHALLENGE OF TRANSFORMING

an Addison Mini Mart into a new urban market called Fresh To Go was one of space. Located near the Chicago Cubs’ Wrigley Field, the site faced restrictive building codes and space constraints that prevented the remodel from incorporating a significant expansion. By embracing these limits, though, the design firm and store owner created a distinctive look that fits the store’s environment.

After

Textures and colors were purposely selected to give the store’s interior an urban feel, but the green and white Fresh to Go palette softens it. The store’s theme of being a convenient resource for shoppers to buy fresh products on their way to work, to a baseball game or anywhere else is reinforced by signage — a “Fill and Go” sign in the fountain area, “Got to Go?” at the restrooms and “Going Somewhere?” above the exit emphasize the store’s fast pace. “Gotta Cool Off?” above the cold vault invites customers to try the wide range of packaged beverages. The end result is a modern stop that serves urban residents and visiting travelers equally well. “You don’t have to be a Cubs fan to enjoy the new Fresh To Go,” said Paragon Solutions. Located near Chicago’s Wrigley Field, Fresh To Go sports an urban feel.

Before

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

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FEATURE

BEST BUDGET REMODEL: Gas Land Blue Hill Shell, Hopewell Junction, N.Y. Designer: Nesheiwat Builders

FORMERLY A 825-SQUARE-FOOT CONVENIENCE STORE with a three-bay garage, Gas

After

Land Blue Hill Shell was reimagined as an upgraded location that would blend in with the local community. Producing the store’s updated look involved removing the garage bays, raising the roof and adding 1,600 square feet to the existing layout. Although the designer and store owner had a clear vision in place, the goal of minimal disruption to the business made the process of achieving it trickier. Accordingly, the project rolled out in phases, starting with the garage bays and eventually moving to the c-store itself. Managing customer traffic was also a challenge, both for the logistics of keeping customers away from active construction due to safety concerns, and for letting them know that the store was still open throughout the building process. “We were able to successfully renovate the entire building with no interruption to the gasoline business, missing a total of one day of business due to the conversion for the electric,” said Gas Land Vice President Zeidan Nesheiwat. The renovations ultimately gave a clean and modern look to the store, inside and out. Bright, custom-made awnings and stonework on the exterior give it a more inviting feel. Inside, the expanded store now has a full deli, 15 cooler doors and open-air coolers for grab-and-go product. These extra features have boosted customer visits as local residents added the store to their morning and after-work routines. The remodel also had a significant effect at the fuel pumps, as the higher number of customers have boosted gasoline sales nearly 40 percent.

Before

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

The remodel of Gas Land Blue Hill Shell added 1,600 square feet to the layout.

FEATURE

BEST TRAVEL CENTER: Big Horn Travel Center, Fort Worth, Texas Designer: Paragon Solutions HOW DOES ONE CAPTURE the essence of Fort

Worth and Texas in a travel plaza design? That was the key question at the beginning of the planning process for Big Horn Travel Center. Located “Where the West Begins,” owner Lisa Hodgkins and designer Paragon Solutions embraced the challenge and captured the spirit of the region in the travel center’s final design. Based on the maxim that everything is bigger in Texas, the store incorporates a spacious layout filled with native materials that “scream Texas.” This includes plenty of antlers and a bear skin rug hung on the walls, plus taxidermied creatures mounted in key areas to fulfill the location’s theme of an upscale Texas hunting lodge. Wood paneling completes the rustic look. Whether customers are on their way to work or driving cross country, Big Horn Travel Center aims to cater to hungry travelers on the go with a cross-section of prepared foods, including the Big Horn Grill, Taco Bueno and Dunkin’ Donuts. The store also has a long stretch of cooler doors and a walk-in beer cave, plus plenty of seating for dine-in customers. To set the location apart from other travel centers along the highway, Big Horn Travel Center includes unique elements such as a fireplace and rocking chairs, which visually invite weary travelers to come in and sit for a while. “Whether you are driving a big rig or an SUV, Big Horn Travel Center is a must-see,” according to Paragon Solutions.

The theme for Big Horn Travel Center is upscale Texas hunting lodge.

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

FEATURE

BEST HYBRID CONCEPT: Edes Custom Meat Market, Amarillo, Texas Designer: Paragon Solutions AS THE HOME OF TOP-NOTCH convenience stores for years, the McKee family, owner and operator of the Pak A Sak chain, knew that any new addition to the Amarillo market would have to be something truly special. The family therefore sought to innovate and create a new store brand that would combine the best aspects of convenience stores and grocery stores. The result is Edes Custom Meat Market.

While the concept is a hybrid, so is the design, as the latest technologies are paired with rich textures and colors that give the feel of an old-time meat market. The meat market itself is a central focus, set apart by brick work and signage that mimics retro stenciling. Moving away from the meat counter, the store transitions into convenience essentials and fresh and canned products, reflecting the brandâ&#x20AC;&#x2122;s supermarket roots. Playful signage incorporating corks in the wine section and an antlered bear in the Beer Barn add touches of humor. Since opening, Edes Custom Meat Market has begun a new chapter of success for the longtime retailer.

Edes Custom Meat Market was designed to combine the best aspects of convenience stores and grocery stores.

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

FEATURE

BEST FOUNTAIN PRESENTATION: BellStores, Wooster, Ohio Designer: Paragon Solutions CAMPBELL OIL CO., PARENT COMPANY of BellStores, didn’t view its former store design negatively. However, the prototype on which its stores were based had been in existence for quite a while and had grown dated. Accordingly, the new design had a distinct goal: shake things up.

After an analysis of all categories, and the creation of a new design that includes the most current technology plus a new palette of materials and colors, it was decided that the fountain area would receive one of the biggest facelifts. Rather than simply adding a countertop unit, the fountain area in the new store design is built into the wall. Signage and cups in bright colors stand out against white tile. Thirsty customers can choose between cold and frozen dispensed (ICEE) drinks. If they opt for the former, they can create their own flavor combinations using a touchscreen interface. This allows for options beyond what a limited number of fountain heads could provide. While the greatest challenge in creating a new prototype for existing chains is the strong loyalty customers have to the existing design they are comfortable with, in BellStores’ case, its detailed assessment process and a series of positive customer suggestions overcame this. Since opening the new prototype, the company has reported very successful results. CSN

BellStores sought to “shake things up” with its new store design.

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

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STORE SPOTLIGHT

Fulfilling Immediate Needs Grocer Tom Thumb introduces its first Tom Thumb Express convenience store, highlighting fresh and convenient grab-and-go offers By Danielle Romano

The Tom Thumb and Dallas Cowboys mascots helped celebrate the opening of the first Tom Thumb Express c-store.

TODAY’S SUPERMARKETS AND CONVENIENCE STORES ARE INTERSECTING, as grocers and

other traditional brick-and-mortar retailers break into the “convenience” scene. Tom Thumb, a division of Boise, Idahobased Albertsons LLC, is the latest retailer to journey into this new territory with its first-ever Tom Thumb Express convenience store.

At a Glance

Tom Thumb Express Location: 2720 Live Oak Street, Dallas Size: 2,500 square feet Unique features: Informative digital screens highlighting offers; fresh grab-and-go items delivered from a nearby Tom Thumb grocery store two to three times daily; beer cave

Located at 2720 Live Oak Street in Dallas, the 2,500-square-foot store is the result of company executives’ desire to fulfill the immediate needs of the Dallas community while a new, full-size Tom Thumb is being constructed. The grocery store is set to open across the street from Tom Thumb Express in 2020 within the Gabriella development, a 10-story apartment building. “The new Tom Thumb is part of a mixeduse development, which takes longer to construct than a typical store,” explained Doug Campbell, senior vice president, marketing and merchandising, Albertsons Cos., Southern Division. “We wanted to begin serving the needs of that community as soon as possible, so we’re delighted to open our very first Tom Thumb Express, [which] offers savings at the pump and a great assortment of grab-and-go items.”

Convenient & Fresh Offers According to Campbell, Dallas was the perfect location and this was the perfect time to introduce the Express concept, as Tom

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Thumb was founded in the heart of Dallas in 1948 and has since served the community for 70 years. Today, 64 Tom Thumb full-size grocery stores operate across the Lone Star State. “We want our customers to know that Tom Thumb Express delivers the same superior shopping experience at a convenience store that they have come to know and expect from Tom Thumb for 70 years,” Campbell said. “They expect a clean, neat, well-stocked store, with a full, fresh assortment of offerings, quality products and excellence in customer service.” Wanting to give customers a “wow” experience inside the store, Tom Thumb Express features informative digital screens that highlight its offers and educate customers. The retailer also installed dual flatscreen monitors describing its hot beverage and foodservice options. In the store’s warmer case, customers will find Tom Thumb Express’ heated food choices, such as breakfast sandwiches, chicken sandwiches and hamburgers, in addition to rotisserie hot dogs, brats and taquitos. The cold case is kept stocked with madefresh-daily sandwiches and salads, fresh-cut fruit and vegetables, yogurt parfaits and snacker trays. Doughnuts, bagels and other assorted pastries make up the store’s baked goods offering. All fresh items are delivered from a nearby full-size Tom Thumb grocery store two to three times a day.

STORE SPOTLIGHT

“We want our customers to know that Tom Thumb Express delivers the same superior shopping experience at a convenience store that they have come to know and expect from Tom Thumb for 70 years.” — Doug Campbell, Albertsons Cos., Southern Division To quench thirsts in the Dallas heat, customers have their choice of an array of cold dispensed beverages, in addition to ICEE and f’real milkshake machines. Meanwhile, hot beverage fare includes cappuccino and fresh-brewed coffee. “Our soda machine looks like a sci-fi fan’s dream come true and can dispense hundreds of flavor combinations. Even the ICEE machine has a digital screen,” Campbell noted. Other amenities available at Tom Thumb Express are: • A beer cave offering domestic, imported and craft brews; • Six self-service fuel pumps offering 12 fueling positions, available 24 hours a day; • Bread, eggs, cheese, milk and other essentials; • Redbox movie rental; • Propane exchange; • Ice merchandiser; and • Air/vacuum station. Enhancing the customer experience outside the store, the retailer is currently working with the owner of the adjourning building — a former 7UP bottling plant — to create a vintage mural on the side of the building that celebrates the significance of both 7UP and Tom Thumb in the community. Planning for the mural was slated to wrap up in late September.

Full Speed Ahead To celebrate the opening of Tom Thumb Express — which A “Fuel Frenzy” event was held as part of the grand-opening festivities.

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Among Tom Thumb Express’ convenient and fresh offers are madefresh-daily sandwiches and salads, and a fully stocked beer cave.

operates 7 a.m. to 10 p.m. daily — the retailer held a “Fuel Frenzy” on June 27, offering the first 100 customers $1 off per gallon of gas, up to 25 gallons. Tom Thumb and Dallas Cowboys mascots pumped gas for customers. When asked about the future of Tom Thumb Express, Campbell told Convenience Store News that the concept will be part of the company’s business plan moving forward; however, he could not disclose when and where the next opening will occur. “At Tom Thumb, our promise is to make every day a better day for our customers. One way we deliver on this promise is by providing a quick, fun and convenient shopping experience. We plan on expanding the Express concept where we can to complement our existing stores,” he concluded. CSN

Save the Date! 11.15.2018 ANNOUNCING ... From the most established brand in the convenience store retailer space comes one of the highest honors in the industry: the Convenience Store News Hall of Fame. This is a must-attend gala event with some of the most admired retailers and suppliers in the c-store industry in attendance, honoring some of the industry’s most influential retailer and supplier executives.

4 REASONS TO PARTICIPATE IN THE CSNEWS HALL OF FAME EVENT: • • • •

Strengthen and develop industry relationships Be known as a leader in the industry Gain visibility for your brand and products Reach retail and supplier executives and key decision-makers

Hall of Fame is an intimate awards gala reception, dinner and award ceremony celebrating the induction of outstanding men and women who have exhibited exceptional leadership and provided significant contributions to the convenience store industry.

2018 HONOREES

RETAILER HALL OF FAMER

SUPPLIER HALL OF FAMER

Jay Ricker

Rick Brindle

Chairman Ricker Oil Co.

Vice President of Industry Development Mondelez International Inc.

AND INTRODUCING...

RETAILER EXECUTIVE OF THE YEAR

Joseph S. Sheetz President and CEO Sheetz, Inc.

Join us as we help nurture and celebrate the exceptional leaders of tomorrow in the convenience store industry. The Convenience Store News Future Leaders in Convenience program celebrates and develops the next generation of convenience retail leaders by providing a forum for talented young business people to hone their leadership talent while recognizing the achievements of an emerging leaders under the age of 35 at the time of nomination. The CSNews Future Leaders in Convenience program provides a comprehensive workshop and networking program that teaches young convenience store managers and executives how to achieve their full potential as leaders in their organizations and the industry at large.

SPONSORSHIPS AVAILABLE! Contact Paula Lashinsky, VP and Brand Director, plashinsky@ensembleIQ.com | 917-446-4117

TWIC TALK

Sharon Kuncl, Eby-Brown The 2016 TWIC Woman of the Year advocates for working together to minimize barriers By Linda Lisanti NOW IN ITS FIFTH YEAR, the Convenience Store News Top Women in Convenience (TWIC) awards program has recognized 200 of the best and brightest women making a positive impact on not only the companies they work for, but also the entire convenience retail channel.

TWIC is the only program that recognizes exceptional female leaders, rising stars and mentors among retailer, supplier and distributor firms in the convenience store industry, from the C-suite to the store level to the independent entrepreneur. In TWIC Talk, our new Q&A series, we interview a past TWIC winner about what it’s like to be a female leader in the convenience store industry today — the opportunities, the challenges — and get their words of wisdom for up-and-comers seeking to blaze their own trail. This month’s TWIC Talk subject is Sharon Kuncl, vice president, merchandising – foodservice at Eby-Brown, a leading wholesale distributor to the convenience store industry. In 2016, Kuncl was one of the five women celebrated by TWIC as Women of the Year.

How would you describe the current state of affairs for gender equality in the convenience store industry? How does this compare to 10 years ago? Ten years ago, any given industry event was attended predominantly by men. There were many times when I was one of only a handful of women in the room. Year over year, there is a difference in the number of females attending convenience industry functions. Like most industries, there are still opportunities for advancement in this area, but there is noticeable progress over the most recent years. I credit manufacturers, distributors and retailers for their work in this area and their actions, which have resulted in change.

What is the most positive change you have personally witnessed? Women and men are inherently different in the way we process information, problem solve and strategize. Over the years, there has been a transition to understanding these

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differences and embracing the positive attributes these variances bring to multiple processes. By diversifying the way we attack issues and thinking about them from multiple perspectives, we have collectively made ourselves better.

Along your career path, did you personally experience gender bias or inequality? If so, how did you overcome? During my 23-year career in the convenience industry, there have been times when I was the only female in a packed room, or at a business dinner, or addressing a room of industry colleagues. It was during these times that I recognized I had an opportunity to make a difference. I never thought of myself as the only woman in the room; I thought of the bigger picture and the progress that the people in the room could collectively make together.

What barriers to advancement do you see still existing in the c-store industry? Much like other industries, the c-store industry has done an admirable job of embracing gender equality. Today, this is reflected in many management teams. However, there does continue to be barriers. Some barriers are institutional mindsets that are not easily changed, but some are personal mindsets that can be altered. It is essential for everyone to be aware these barriers exist and work together to minimize them. Ideally, change occurs by challenging ourselves to identify talent and offer leadership opportunities through education, peer coaching and mentoring.

What is your advice for other industry women looking to rise to higher ranks? In order to climb in the ranks of leadership, you have to always be growing. You have to keep your mind sharp and fresh with new ideas and learnings about the world, our industry, or something completely outside of your comfort zone. Overall, my advice is to be passionate, be engaged, be ambitious and don’t mind being the one to lead the way. CSN

Solving Big Problems, Inspiring Bold Ideas EnsembleIQ is a premier business intelligence resource that believes in Solving Big Problems and Inspiring Bold Ideas. Our brands work in harmony to inform, connect, and provide predictive analysis for retailers, consumer goods manufacturers, technology vendors, marketing agencies and service providers. EnsembleIQâ&#x20AC;&#x2122;s integrated suite of solutions-based, total-market resources give you all the tools you need to achieve a strategic market advantage, giving you the insights, positioning, focus, and access, along with a team of dedicated strategic consultants to help you bring it all to life.

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ADINDEX Almark Foods ........................................84 Altria Group Distribution Phillip Morris............................................2-3 Anchor Packaging ...............................71 Anheuser-Busch Inc. ..........................89 Aperion (a Hussmann company) ....19 Autofry/MTI, Inc. ..................................67 BIC USA Inc. ...........................................113 Blu E-Cigs ..........................Cover Ad, 163 Brill .............................................................65 Campbell Soup Company ................49 Cash Depot, LTD ..................................22 Cheyenne International ....................129 Chobani Inc. ...........................................53 Convenience Distribution Assn........87 Cookies United ......................................77 Core-Mark International Inc. .............131 Del Monte Fresh Produce Inc. ..........23 Dosal Tobacco Corp. ........................... 80 E-Alternative Solutions .....................12-13, 133 E & J Gallo Winery .............................95 Ferrero USA, Inc. ..................................103 Flowers Foods Inc. .............................29 Forte Products ......................................26 GinSan Industries .................................28 Glanbia Performance Nutrition ........74 GlaxoSmithKline ...................................59, 135 Goya Foods, Inc. ...................................85 Growth Energy ......................................97 GT’s Foods ..............................................83 Heartland Food Products Group.....73 Horizon Food Group ............................75 Hughes Network Systems ...............117, 164 Hunt Brothers Pizza LLC ..................69 Hussmann Corporation .....................14 Ice House America ..............................16 Imageworks Display & Marketing....123 Inline Plastics Corp. ............................20-21 Inter-Continental Cigar Corp. ...........18 J&J Snack Foods Corp. ....................47, 111 Jack Link’s Beef Jerky .......................107

Jelly Belly ................................................101 John Middleton Company ...............41 JUUL Labs ...............................................25 Kretek International ...........................37 Krispy Krunchy Chicken ...................43 Liggett Vector Brands ......................31 Living Essentials LLC .........................55 Mars Chocolate NA/ Wrigley............15 Micro Matic USA, Inc. ........................98 Mondelez National ...............................99 National Tobacco Company ...........27 Nestle Worldwide ................................33 New Pig Corp. .......................................32 Novolex ....................................................108 Old Wisconsin Sausage Inc. ..............51 Omega flex Inc. .....................................24 Paragon Solutions ................................30 Perfetti Van Melle USA Inc.................119 Premier Manufacturing ...................... 125 Renewable Energy Group ................. 61 Reynolds American Trade Marketing Services ...............................9 Rich Products Corporation .............93 Seda International Packaging Group...................................79 Stryve Protein Snacks ........................ 109 SUBWAY ..................................................57 Swedish Match North America LLC............................................5, 62-63, 81 Swisher International .........................17, 137 Taylor Company ....................................115 Tyson Foods ...........................................7, 121 The Wonderful Company ................105 U.S. Food and Drug Administration ........................................34-35 Uline ..........................................................114 Universal Merchants ............................Outsert Wayne Fueling Systems......................39 White Castle Food Products, LLC ..127 WhiteWave Foods to Danone Away From Home .................................91

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Convenience Store News (ISSN 0194-8733; USPS 515-950) is published 12 times per year, monthly, by EnsembleIQ, 8550 W, Bryn Mawr Chicago, Il 60631. Copyright © 2018 by EnsembleIQ. 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.

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GETTING TO THE CORE

Nutritionally Minded, Sort Of Convenience store shoppers show some interest in calorie/nutrition information

Four in 10 convenience store shoppers say they usually or always review the calorie/nutrition information of non-packaged food items at grocery stores, but less than 25 percent do the same when theyâ&#x20AC;&#x2122;re shopping at a c-store. EIQ Research Solutions, an EnsembleIQ sister company of Convenience Store News, recently surveyed 500 consumers who shop a convenience store at least once a month to learn about the role nutrition information plays in their eating and purchasing habits. Among the findings: When c-store shoppers do review nutrition information, they are most concerned with the sugar content of their food.

24.84%

How many calories are you supposed to be consuming on a daily basis? 1,000-1,999 (net) 2,000-2,999 (net) 3,000-3,999 (net) 4,000-9,999 (net)

47.41% 45.63% 4.53% 2.43%

How confident are you that this is correct? This is just a guess, I donâ&#x20AC;&#x2122;t really know I think this is correct I am fairly certain this is correct I am very confident this is correct I am 100% positive this is correct

C-store shoppers arenâ&#x20AC;&#x2122;t overly confident when it comes to knowing their recommended daily calorie intake.

22.90% 14.07% 29.05% 22.13% 11.86%

Base: 506 consumers who shop a convenience store at least once a month Source: EIQ Research Solutions

Convenience store shoppers rated the importance of having calorie/nutrition information for non-packaged foods (i.e., prepared and fresh items) visible at the time of purchasing at a 6.68 on a scale of 1 to 10, where 10 is extremely important and 1 is not at all important.

The percentage of c-store shoppers who say they usually or always review the calorie/nutrition information of nonpackaged food items at convenience stores. This is compared to 45.98% who say they rarely or never do so.

Which of the following do you typically look for on nutrition labels? Calories overall

60.72%

Calories from fat

33.21%

Total fat

37.95%

Saturated fat

36.64%

Trans fat

31.45%

Cholesterol Sodium Total carbohydrates Dietary fiber Sugar Vitamins/minerals

29.80% When they do review labels, c-store shoppers appear to be most concerned with the sugar content of their food, followed by calories and sodium.

47.00% 33.30% 23.07% 64.36%

Other 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.

Survey respondents sourced via ProdegeMR, reinventing the market research process by taking a respondent first approach. Visit prodegemr.com/ensembleiq for more info.

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Base: 506 consumers who shop a convenience store at least once a month Source: EIQ Research Solutions

25.56% 6.87%

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