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VIEWPOINT By Don Longo, Editorial Director

Innovation Part of This Industry’s DNA Convenience stores live on new ideas, products and concepts

O

ur focus in this issue is innovation. Innovation is the lifeblood of any industry and a strategic priority for leaders of growing companies. The convenience store industry is often overlooked as a breeding ground for innovation. From its origins as an icehouse in Texas to today’s modern, international retail operation, the c-store industry has constantly evolved to meet changing consumer needs. We’ve seen innovation in technology, such as the adoption of industry standards and customer-facing improvements like touchscreen kiosks and mobile ordering. We’ve seen innovation in product development, from energy drinks, to shots, to e-cigs. And we’ve seen innovation in format development, from the introduction of motor fuels to the development of restaurant-quality foodservice operations. As today’s consumers place an increasing premium on For comments, please contact Don Longo, Editorial Director, “convenience,” convenience store at (201) 855-7606 or retailers, wholesalers and suppliers dlongo@ensembleiq.com. are still innovating to meet new and ever-evolving shopper needs. Inside this issue, we look at the latest innovations in the c-store industry. We also look at store design innovation as we profile the winners of this year’s Convenience Store News Store Design

Contest, and we celebrate product innovation with this year’s winners of the CSNews Best New Products Awards. We also take a look at how consumers define innovation when they think about convenience stores. At CSNews, we believe in the power of innovation. That’s one of the reasons we feature cover stories on innovative retailer companies, like last month’s profile of fast-growing Maverik Inc., and innovative industry leaders, like September’s cover story on Retailer Executive of the Year Ari Haseotes of Cumberland Farms, who is being honored this month along with two other industry innovators, Chet Cadieux of QuikTrip and Bob Johnson of Pinnacle at the CSNews Hall of Fame induction ceremony in Tulsa, Okla. We also pioneered the c-store industry’s first Foodservice Innovators Awards program five years ago. Sponsored by Tyson Convenience, this annual awards program recognizes industry leaders that are dedicated to elevating fresh food and beverage in convenience retail. Convenience retailers that have demonstrated both excellence and innovation are selected through ballots submitted by CSNews’ How To Crew of foodservice experts. For an exciting, close-up look at these innovators, watch our new video at http://www.csnews.com/2016foodservice-innovators. Our cameras take you on a tour of these chains and include interviews with the people spearheading these innovative efforts.

CSNews has been recognized with more editorial awards, including the prestigious Jesse H. Neal Award for business journalism, in the past six years than any other industry publication. 2013 Jesse H. Neal National Business Journalism Award Best Single Issue, October 2012 2013 Jesse H. Neal National Business Journalism Award Finalist, Best Profile, August 2012 2008 Jesse H. Neal National Business Journalism Award Best Single Issue, October 2007 2016 Trade Association Business Publications Intl. Tabbie Awards Silver, Front Cover Illustration, June 2015 2010 Trade Association Business Publications Intl. Tabbie Awards Honorable Mention, Front Cover Illustration, October 2009 2009 Trade Association Business Publications Intl. Tabbie Awards Gold, Front Cover Illustration, February 2008 Honorable Mention, Best Single Issue, October 2008

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

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

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


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CONTENTS NOVEMBER 2016

VOLUME 52/NUMBER 11

26 | COVER STORY C-store Innovation Nation

The land of “cokes and smokes” is fast becoming the land of inventive new ideas. 30 | C-store Industry Inspiration Board Get your creative juices flowing, using these innovative concepts as a starting point. 38 | The Consumer View How convenience store shoppers judge innovation and emerging trends at the store. 40 | More Than a Store

This year’s CSNews Store Design Contest winners are all about the experience. 52 | Tapping Into Today’s Consumer Trends

CSNews honors 17 top new products of the year during the NACS Show.

INDUSTRY ROUNDUP 14 | Amazon Prepares to Enter Convenience Channel 16 | Delek Makes Move for All of Alon USA 18 | CST Shareholders Prepare to Vote on Couche-Tard Merger 18 | Eye on Growth 19 | Competitve Watch 19 | Supplier Tidbits 20 | Retailer Tidbits 21 | Marketing Moves Convenience Store News (ISSN 0194-8733; USPS 515-950) is published 12 times per year, monthly, by EnsembleIQ, 570 Lake Cook Rd. Deerfield, IL 60015. Copyright © 2016 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.

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


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

BRAND MANAGEMENT Group Brand Director (330) 840-9557

Ron Lowy rlowy@ensembleiq.com

EDITORIAL

22 66 FEATURES 22 | The Industry’s Leading Ladies Take Center Stage Third Top Women in Convenience class inducted by CSNews at special reception.

CATEGORY MANAGEMENT FOODSERVICE

62 | What’s Behind Foodservice Lunch Visit Declines? Of all the main meal dayparts, this one is experiencing the steepest decline. CANDY & SNACKS

66 | Marketing by Mindset C-stores can boost candy sales by focusing on consumer emotions and special occasions.

DEPARTMENTS VIEWPOINT

4 | Innovation Part of This Industry’s DNA Convenience stores live on new ideas, products and concepts.

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

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

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

CORPORATE OFFICERS Executive Chairman

Alan Glass aglass@ensembleiq.com Peter Hoyt phoytensembleiq.com Chris Stark cstark@ensembleiq.com Ned Bardic nbardic@ensembleiq.com Korry Stagnito korrystagnito@ensembleiq.com Joel Hughes jhughes@ensembleiq.com

President & CEO Chief Financial Officer

12 | CSNews Online

Chief Customer Officer

STORE SPOTLIGHT

Chief Operating Officer

70 | Going Within Some big names in convenience are opening new stores without fuel, counting on a strong in-store offering and fresh food to attract and retain customers.

Chief Digital Officer

OUT & ABOUT

74 | Growing Past the Growing Pains CDA focuses on assistance, education at its Convenience Distribution Business Exchange. 90 | Getting to the Core

CONVENIENCE STORE NEWS AFFILIATIONS

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

Jack Lewis GPM Midwest

Jonathan Polonsky Plaid Pantries Inc.

Danielle Mattiussi Maverik Inc.

Greg Scriver Kwik Trip

Kyle McKeen Alon Brands Inc.

Roy Strasburger Convenience Management Services Inc.

Richard Mione GPM Southeast

Jon Urbanik CST Brands Inc.

The contents of this publication may not be reproduced in whole or in part without the consent of the publisher. The publisher is not responsible for product claims and representations. 8 Convenience Store News | NOVEMBER 2016 | WWW.CSNEWS.COM


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CSNEWS.COM TOP 5 Daily News Headlines The most viewed articles online.

1 | Seven & i Reveals Details of Planned 7-Eleven Growth Boom 7-Eleven Inc. parent, Seven & i Holdings Co., plans to expand its North American convenience store holdings dramatically via acquisitions. The Tokyo-based company aims to have 10,000 c-stores in North America by its 2019 fiscal year vs. the 8,900 stores it had as of June 30. 2 | Former Pilot Flying J Execs Want to Move Trial Former Pilot Flying J executives are seeking a change of venue for their upcoming trial on charges related to allegations of fraud in the company’s fuel rebate program. In a filing, attorneys for former president Mark Hazelwood; former vice presidents Scott Wombold and John Freeman; and other ex-employees asked a federal judge for permission to file a lengthy request to change the location of the trial, now slated to be held in Pilot Flying J’s hometown of Knoxville, Tenn. 3) House Votes to Delay Federal Overtime Rule In a late-night vote on Sept. 28, the U.S. House of Representatives passed legislation to delay implementation of the new federal overtime rule by six months. The measure, known as the Regulatory Relief for Small Businesses, Schools and Nonprofits Act, directs the U.S. Department of Labor to push the implementation date back from Dec. 1 to June 1, 2017. 4 | 7-Eleven Unplugs Belly’s iPad Loyalty Program Two years after initiating their relationship, 7-Eleven Inc. and Belly are dropping their loyalty program partnership. Irving, Texas-based 7-Eleven will likely shift its focus to its 7Rewards program. 5 | Buc-ee’s Halts Plans to Move Into Louisiana Buc-ee’s first foray outside of its home state of Texas will have to wait now that the retailer is pulling back on plans to open a location in Louisiana. In March, Buc-ee’s revealed plans to open a 60,000-square-foot retail store with more than 90 fueling stations at the Greens at Millerville, a 56-acre development in Baton Rouge. The company has since canceled those plans because it was unable to secure additional real estate in Louisiana.

COMMENTARY: Small Retailers Penalized by Renewable Fuels Mess In an op-ed piece for CSNews Online, Bill Douglass of Douglass Distributing shares his perspective on the Renewable Fuels Standard’s negative impact on small fuel retailers. Currently, refiners and importers are obligated to demonstrate compliance with the program. Because these companies aren’t necessarily blenders, they need to buy RINs to comply. The blending is often done by Big Oil companies, as well as by large retail convenience store chains who’ve realized they can get in on the action. These retailers have no obligation under the program, so instead of having to turn in 12 Convenience Store News | NOVEMBER 2016 | WWW.CSNEWS.COM

ONLINE EXCLUSIVE How to Get Guest Wi-Fi Right

As convenience stores increasingly evolve into destination spots, guest Wi-Fi not only helps differentiate the in-store experience and attract new customers, but it also provides new opportunities for customer engagement and employee training. Given the devastating impact of recent security breaches on major brands, though, store operators are wise to carefully consider the security requirements for guest Wi-Fi. The free service can be a dream for hackers if not handled correctly. For more exclusive stories, visit the Special Features section of www.csnews.com.

PRODUCT HIGHLIGHT

The most viewed New Product online.

Rapid Onsite Solution

Rapid Onsite by Rapid RMS is an iPad point-of-sale (POS) system integrated with a fuel pump controller that allows convenience store operators to automate inventory management, track customer loyalty, create purchase orders, and more. The solution also enables retailers to update fuel pricing from anywhere using Rapid Back-Office, while allowing cashiers to accept fuel requests and activate prepays. Rapid Onsite updates automatically, requires minimal maintenance, and provides chip card compliance both in-store and at the pump. Retailers who make the switch will save an estimated 80 percent on their average cost for maintenance and repairs, according to the company. The system is available for $50 per month, and customers will save more than 40 percent on initial hardware costs, the supplier additionally noted. Rapid RMS Chattanooga, Tenn. (888) 727-4302 info@rapidrms.com  www.rapidrms.com/onsite

their RINs to show the government how they’re complying, they are free to sell them to refiners and importers unable to hit their constantly increasing targets. “That’s where guys like me lose out,” Douglass writes. “If you’re an independent retailer, and not part of a big retail convenience store chain with the resources to blend fuels at these big terminals, you gain nothing from the RIN market. Yet my retail competitors who are part of those big chains now benefit from their parent company’s RIN-generated windfall: added revenue that can be used to undercut small competitors; open up more locations; you name it.” To read Douglass’ full commentary, visit the Special Features section of www.csnews.com.


INDUSTRYROUNDUP FAST FACT

Amazon Prepares to Enter Convenience Channel The rise in employees working at home and more shopping online, which cuts down on foodservice meal and snack breaks, have been contributors to the softening of lunch traffic. Source: The NPD Group (page 62)

QUOTABLES

“Thinking about some of the initiatives other channels have and implementing them into convenience retailers is certainly not a far stretch. I think we can have an ethnic assortment and ethnic banners for certain convenience retailers, no question.” — Chelsea Gross, RetailNet Group LLC (page 26)

C-store retailers have mixed reactions to the online giant’s plans for small stores

A

mazon.com Inc. is moving into the brick-and-mortar world with plans to open convenience stores and curbside pickup locations. The small stores would offer produce, meats, milk and other perishable items. Customers could also order items with longer shelf lives, such as peanut butter and cereal, for same-day delivery. The Seattle-based retailer also plans to introduce designated drive-in locations where online grocery orders will be brought directly to a customer’s car. Amazon is developing technology that reads license plates in order to speed up this process. While traversing the halls of the Georgia World Congress Center on the opening day of the 2016 NACS Show, Convenience Store News editors polled retailers for their thoughts on Amazon’s plans. A majority of the retailers are curious to see what unfolds. “It’s the wave of the future. Anything you pick up online, you talk about Amazon. It’s big. It just depends on how we react to it and what benefits there could be. There’s always opportunity,” said AJ Gambino of Coastal Area Stores Inc. dba Clyde’s Market in Glennville, Ga. Others acknowledge Amazon could be a serious c-store industry threat.

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

“Amazon is a challenge for everybody because people can sit at their home with their feet up and order whatever they want. It’s a challenge and we have to find our inroads to beating them; to make it convenient for the convenience store at your home,” said David Lewis of the Marine Corps Exchange dba U.S. Marine Corps in Camp Pendleton, Calif. Still, there are those who are not as concerned. “I don’t see it as a big threat. We do some stuff with Amazon Lockers at some of [our] sites, and it’s a draw. You see where you can take advantage of it in most cases. I’m not sure what their format will be. You always have competition coming into the marketplace and you find ways to either take advantage of it or piggyback on it,” weighed in Ron Reger of Kaykel Fueling Convenience in Corona, Calif.


THIS IS WHERE I FIND

My Inspiration

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Great-tasting food in convenient stores? Conventional wisdom says no. We’ve proudly turned that tradition on its head, offering a made-to-order food program to rival any quick-serve restaurant. Despite our success, there’s still much to learn about foodservice. Which is why, each May, I head to NRA Show®. It’s here—walking the Show floor, attending seminars, connecting with industry experts, soaking in best practices—that I find the inspiration to continually improve my operation. And keep my customers coming back for more.

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INDUSTRYROUNDUP

Delek Makes Move for All of Alon USA

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Proposed deal seeks remaining 52 percent of North America’s largest 7-Eleven licensee

A

lthough it had been rumored for a while, Delek US Holdings Inc. formally proposed in midOctober to acquire the remaining portion of Alon USA Energy Inc. it does not already own. Delek currently owns 48 percent of Alon. During an August 2015 earnings call, Delek Chairman and CEO Uzi Yemin said his company is “not in the business” of owning only 48 percent of any publicly traded company. Delek’s proposed all-stock transaction would see Alon stockholders receive 0.44 of a share in Delek for each share of Alon owned. “We believe both companies are currently undervalued to differing extents by the market, and our proposal reflects — in the context of the current and prospective challenges facing Delek’s and Alon’s sector — our view of the relative fundamental values of Alon and Delek; each company’s respective outlook and balance sheet profile; and potential synergies for the transaction,” Yemin wrote in an Oct. 14 letter that was disclosed in an U.S. Securities and Exchange filing. “We believe this combination would create significant value for the respective stockholders of Delek and Alon in both the near- and long-term, and the 100-percent equity consideration would allow Alon stockholders — many of whom are also currently Delek stockholders — the opportunity to fully participate in that value creation as it is realized,” he continued. The merger will likely require shareholder approval from both companies.


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INDUSTRYROUNDUP

CST Shareholders Prepare to Vote on Couche-Tard Merger CST Brands Inc. shareholders will vote on the company’s proposed acquisition by Alimentation CoucheTard Inc. on Nov. 16 at CST’s San Antonio headquarters. The vote will take place at 9 a.m. local time. Laval, Quebec-based Couche-Tard, parent of the global Circle K brand, announced on Aug. 21 its acquisition of CST Brands for $48.53 per share, or approximately $4.4 billion, pending shareholder approval and government regulatory approval in Canada and the United States. In most cases, shareholders overwhelmingly approve such merger deals during special meetings. However, in this case, multiple parties have filed lawsuits to prevent the merger, with the main objection

being an allegation that the purchase price is too low. If approved by CST shareholders and government agencies, the acquisition is expected to be completed in early 2017.

eye on growth n Nouria Energy Corp. completed an

acquisition of F.L. Roberts & Inc. for an undisclosed sum. The transaction involved 26 convenience store locations with fuel, including two truck stops, 22 Golden Nozzle car washes, and a diner. n CrossAmerica Partners LP sealed its

deal to acquire State Oil’s retail assets and wholesale fuels distribution for $43.1 million. The portfolio included three company-operated stores, 50 lessee dealers, 24 supply accounts, two non-fuel tenant locations, and three non-operating sites. n Alta Convenience Stores

parent Western Alta Holdings LP Co. acquired the retail division and operating company of Pester Marketing Co. from World Fuel Services Corp. The c-stores will operate under the Alta Convenience brand name. n Sunoco LP finalized a $53-million transaction with

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

Denny Oil Co. The deal included Denny Oil’s Check Point convenience store chain, along with its network of company-owned, dealeroperated convenience stores. n GPM Investments LLC

expanded its footprint with the closing of the acquisition of 17 c-store/gas station locations and one standalone car wash from Jiffi Stop Stores. The locations will continue to operate under the current Jiffi Stop brand name. n Empire Petroleum Partners LLC bought the

wholesale distribution rights of Sunshine Fuel LLC in Missouri, Oklahoma and part of Kansas. The addition of these accounts gives Empire entry into new markets. n Street Corner opened an

“urban superette” concept in Chattanooga, Tenn. Billing itself as a “fresh market,” the store features a deli, salad bar and other fresh-food offerings.


competitive watch n Walmart is scaling back

new store growth, instead choosing to ramp up its e-commerce platform. The retailer’s total unit growth for small-format stores will be 161 in fiscal year 2016, a projected 70 in fiscal year 2017, and a projected 20 in fiscal year 2018. n Uber discontinued its “Instant Delivery” lunch service

in many major U.S. cities. The service, part of Uber’s UberEats app, launched one year ago and was originally incorporated into its traditional transportation app. n McDonald’s Corp. is testing break-

fast Happy Meals at 73 restaurants in Tulsa, Okla. If the test is successful and expands to a national rollout, it would mark the first new Happy Meal entrée in more than 30 years.

supplier tidbits n Anheuser-Busch InBev closed

on its $100-billion-plus acquisition of SABMiller plc. The combined company will have operations in just about every major beer market.

president-elect and CEO-elect of Reynolds American Inc., effective Jan. 1. Current RAI President and CEO Susan Cameron will become executive chairman of the board of directors. n Premier Manufacturing, the consumer products division

n Molson Coors Brewing Co. closed on its transac-

tion for SABMiller’s 58-percent stake of MillerCoors LLC. This deal was a result of Anheuser-Busch InBev’s acquisition of SABMiller, completed Oct. 10

of U.S. Tobacco Cooperative Inc., reached an agreement to purchase 100 percent of the stock of King Maker Marketing Inc. from its parent company ITC Limited. The deal includes nationally distributed value cigarette brands Ace, Checkers, Gold Crest and HiVal.

n British American Tobacco plc (BAT) offered to acquire

Reynolds American Inc. (RAI) for $47 billion. The RAI board of directors, consistent with their fiduciary duties, is evaluating the bid. BAT already owns 42.2 percent of RAI. n NJOY Inc. filed for Chapter 11 bank-

ruptcy protection, citing the market performance of its second-generation Kings disposable e-cigarette in 2013-2014 and costs associated with a subsequent relaunch of the NJOY brand. Its filing also mentions “substantial expenses” related to the new deeming rule.

n AdvancePierre

Foods completed an acquisition of Allied Specialty Foods Inc., a manufacturer of raw and cooked beef and chicken Philly steak products, from Steven Zoll. The deal carried a $60-million price tag. n Convenience dis-

tributor Eby-Brown Co. LLC rebranded its proprietary Wakefield foodservice line. Along with the existing lineup of sandwiches, Wakefield will now feature healthier options, such as fresh parfaits.

n The Hershey Co. Chairman, President and CEO John

P. Bilbrey will retire from the company effective July 1. He will continue as non-executive chairman of Hershey’s board of directors following his retirement. n Debra A. Crew, currently president and chief operating

officer of R.J. Reynolds Tobacco Co., has been named

n Noble Roman’s Inc., franchisor and licensor of Noble

Roman’s Pizza, signed an agreement with TMC Franchise Corp. to be a preferred supplier for its franchised Circle K, Kangaroo Express and On the Run banners. This encompasses approximately 800 U.S. locations.

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


INDUSTRYROUNDUP

retailer tidbits their fueling process at Pilot Flying J travel centers.

n Rutter’s Farm Stores opened

its first beer cave. The feature at its Mercersburg, Pa., store holds a variety of craft, import, and domestic beers and ciders in singles and six-packs.

n Thorntons Inc. is partnering with

Alessi Bakery, which will provide a variety of doughnuts, pastries and other baked goods. Alessi’s products were available in Thorntons’ Florida stores as of Oct. 1.

n RaceTrac Petroleum Inc. will expand its fuel offering

this year with the debut of E15 fuel at its convenience stores throughout the South. The chain will ultimately offer E15 at more than 100 locations.

n Stripes Convenience Stores’ Laredo Taco Co. launched

“the champion” of all tacos. The limited-time EL CAMPEÓN is filled with egg, chorizo, potato, beans and cheese. Customers were able to buy one, get one free on Oct. 4.

n Stewart’s Shops Corp. is the 2016 recipient of The

Advancement of Women in the WERCplace Award in New York State. About 50 percent of its shop managers and 85 percent of its assistant shop managers are women.

n The Kroger Co. struck a deal with Wayne Fueling

n Pilot Flying J is integrating its MyPilot mobile app

with Pegasus TransTech’s Transflo Mobile platform. The move will allow professional drivers to speed up

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Systems for an EMV upgrade of 10,000 automated fuel dispensers at more than 2,100 of its locations. Under this agreement, Wayne will provide the new Wayne iX Pay T7 secure payment terminal retrofit kit.

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marketing moves duced this month with a giveaway sweepstakes including more than 100 high-end prizes.

n Stripes Convenience Stores cel-

ebrated Día de los Muertos 2016 with the release of two new limited-edition Día de los Muertos commemorative dispensed beverage cups. Each cup was priced at $2.99 and included the first fill free.

n Motiva Enterprises LLC signed a sponsorship agree-

n Sinclair Oil Corp. and Bennett Pump Co. are bringing

NewsBreak Media Networks’ merchandising platform to display screens on the forecourt at Sinclair’s flagship store in Salt Lake City. The content on the screens will feature Sinclair-branded merchandising messages promoting in-store offerings. n Forward Corp.

ment for the 76 brand to be the exclusive retail gas sponsor of the Houston Dynamo, an American professional soccer club. As part of the pact, the Southwest Gate at BBVA Compass Stadium in Houston will be known as the “76 Gate.” n MFA Oil Co.’s Break Time retail division will imple-

ment a new loyalty program, MyTime Rewards. It will be available at the chain’s 74 convenience stores in Missouri and Arkansas starting in December. n Wawa Inc. unveiled a “Fall Free for All” promotion

switched the loyalty program for its Forward Convenience Stores to the Paytronix Systems Inc. platform. The new program will be intro-

to reward customers for connecting through its mobile app and Wawa Rewards program. All members with a registered gift card receive something free every week for nine weeks, Oct. 10 through Dec. 12.

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Visit us: cdlatm.com 1-800-776-8834 WWW.CSNEWS.COM | NOVEMBER 2016 | Convenience Store News 21


The Industry’s Leading Ladies Take Center Stage

Third Top Women in Convenience class inducted by CSNews at special reception By Danielle Romano

C

onvenience Store News once again used the backdrop of the NACS Show, the largest annual gathering of the convenience store industry, to present its 2016 Top Women in Convenience (TWIC) awards. On the evening of Oct. 19, once the expo floor had closed for the day, showgoers were invited to head over to the Omni Atlanta Hotel at CNN Center for a special reception celebrating the industry’s most outstanding female leaders and rising stars. “The CSNews Top Women in Convenience awards program recognizes a diverse array of women from both the retailer and More than 300 c-store professionals turned out to honor the industry’s top women. supplier sides of the industry, from leaders to mentors to rising stars and role models,” nience retail channel. Among this year honorees were CSNews Editorial Director Don Longo said at the 24 senior-level leaders (positions of vice president and third-annual event. above), 21 rising stars (job titles above store manager, The 2016 inductee class included 62 of the best and but below vice president), five mentors (women who brightest ladies making a positive impact in the convehave made an extraordinary impact on the careers of

7-Eleven honorees Ena Williams (left) and Nancy Smith were all smiles.

Eby-Brown’s Sharon Kuncl was recognized as a Woman of the Year.

22 Convenience Store News | NOVEMBER 2016 | WWW.CSNEWS.COM

Altria execs Maura Scott and Blake Benefiel presented Maverik’s Danielle Mattiussi with her Woman of the Year award.


Congratulations

Congratulations to all of the Top Women in Convenience, including those from the Coca-Cola team! Thank you for your remarkable contributions to the industry!

Roxanne Lowder VP National Retail Sales, Coca-Cola North America

Laura Wayne National Sales Director, The Coca-Cola Company

Š 2016 The Coca-Cola Company


This year’s 21 Rising Stars honorees showed off their new hardware.

their colleagues), five store managers, and two singlestore owners. “Women are making an impact in leadership roles. … We need to embrace our women, and embrace the inclusion of women, men and the next generation,” remarked Dagmar Boggs, TWIC alumnus and president of the 7-Eleven Global Customer Team for The CocaCola Co. Boggs spoke on behalf of the Network of Executive Women (NEW), a TWIC program partner. As in years past, the honorees were chosen based on nominations received from their peers, drawing from achievements during the previous 12 months. From the entire pool of nominees, judges also chose five as the best of the best and awarded them the title of Women of the Year. The 2016 Women of the Year were: Laura Asbell, regional vice president of convenience for Mondelez International Inc.; Niki DePhillips, senior vice president, store development for Kum & Go LC; Sharon Kuncl, vice president, merchandising — foodservice at Eby-Brown Co. LLC; Danielle Mattiussi, vice president, retail adventures for Maverik Inc.; and Nancy Smith, senior vice president, merchandising, fresh food and beverages at 7-Eleven Inc. “[These] five women have been selected as our 2016 Women of the Year for their exceptional impact not only on the success of their own companies, but also their positive impact on the convenience store industry overall,” Linda Lisanti, editor-in-chief of CSNews, told the audience. During her acceptance speech, Kuncl noted that when it comes to women in leadership roles, they often have to make sacrifices. She expressed gratitude for her family’s support at home. Mattiussi, during her turn at the podium, said she

24 Convenience Store News | NOVEMBER 2016 | WWW.CSNEWS.COM

A total of 24 senior-level leaders were recognized.

was “humbled to be part of this awards program and the industry in general, with its diversity and vibrancy.” Sponsors of the 2016 TWIC program included presenting sponsor Altria Group Distribution Co.; platinum sponsors R.J. Reynolds Tobacco Co. and Ruiz Foods; and gold sponsors BIC Consumer Products, The Coca-Cola Co., Eby-Brown Co. LLC, The Hershey Co., Logic Premium Electronic Cigarettes, McLane Co. Inc., and Mondelez International Inc. CSN

The year’s top store managers took their turn in the spotlight.

Five women were celebrated for their mentoring skills.


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cover story

C-store INNOVATION

NATION

The land of “cokes and smokes” is fast becoming the land of inventive new ideas A Convenience Store News Staff Report

T

he convenience retail channel, long known as the place for “cokes and smokes” in years past, has not typically been lauded for its innovation. But that is changing, and never more so than now. As today’s consumers place an increasing premium on “convenience,” c-store retailers, wholesalers and suppliers are innovating to meet new and everevolving shopper needs. “Experience” has become a buzzword in retailing, and convenience channel players on all sides of the supply chain are realizing experience really starts with innovation. Over the last decade, the convenience channel has actually broken into two segments: the traditional convenience stores that most consumers are familiar with, and the convenience superstores (think Wawa Inc. and Sheetz Inc.) that are rolling out fresh experiences, observed Chelsea Gross, an analyst with RetailNet Group LLC. “Many pieces of U.S. convenience need reinvention and, ultimately, we are seeing the expectations of the convenience trip being defined by certain innovative c-store retailers,” she said. “…These are experiences where the family goes to the gas station, but they also sit down and have a quick meal. It’s very easy to order because of automation in the store. They do things like have a separate counter for tobacco so there is a quicker checkout for those people who are looking for that quick trip. They are really reinventing the experience in convenience in so many different ways, and you see it

26 Convenience Store News | NOVEMBER 2016 | WWW.CSNEWS.COM

unfold from a sales and store growth perspective.” Convenience superstores are outpacing sales growth not only for the total convenience industry, but also the total U.S. retail industry. And the same can be said for store growth, Gross explained. Notably, convenience superstores represent six of the top 10 convenience banners for sales added, and five of the top 10 convenience banners for stores added. “They are really starting to have a role in the growth platforms for convenience,” she said. LEADING THE WAY

In addition to the increasing number of convenience superstores, Gross offered some other examples of innovation happening in the convenience channel: • 7-Eleven Inc. has strengthened its private-label product offering and is giving its proprietary 7-Select brand prime shelf space in its stores. • Sheetz is taking up residence on college campuses and in doing so, the chain is “capturing consumers while they are in that transitional period to peak [retail] consumption, which happens at about [ages] 25 to 34.” • Casey’s General Stores Inc. is using mobile tactics to up its game. Notably, a popular pizza-themed game on its mobile app successfully engages customers. While fellow c-store retailers should certainly draw inspiration from these innovative ideas, Gross cautioned that they should not just copy what a chain like Wawa is doing. Rather, they should look at what a competitor is doing well and then innovate further


WWW.CSNEWS.COM | NOVEMBER 2016 | Convenience Store News 27


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around that premise. C-store operators should look outside the convenience industry, too, to find inspiration (i.e., grocery channel initiatives, quick-service restaurant initiatives). Pointing to the channel-blurring environment for the convenience trip, Gross noted that c-store operators can learn from disruptors “because they are now, increasingly so, a direct competitor to traditional convenience retailers — we can apply a lot of the ideas they are implementing into our stores.” COMPETITOR CUES

Channel blurring today is being driven by format diversification that targets ethnic, small-format and discounter trips. New small-format concepts are particularly ripe with innovation. Grocer H-E-B is starting to shift to urban, smaller-box stores but maintaining the same level of experience one would expect to find

Chew on These Innovation Sound Bites “I personally think that it [innovation] is an overused term. Most changes that I see, including at QT, are evolutionary more than they are innovative. By that I mean, getting better every day or constant improvement. Whatever you want to call that constant improvement process, I think it is critical to a company’s survival.” — Chet Cadieux, president of QuikTrip Corp., CSNews’ 2015 Retailer Innovator of the Year

“Every day, we come to work with the vision of creating the Sheetz that will put the Sheetz as we know it today out of business. We’ve hired people who are creative and passionate about food, who embrace our fast pace and the pioneering mentality we have at Sheetz.” — Joe Sheetz, CEO of Sheetz Inc., CSNews’ 2014 Retailer Innovator of the Year

“What Amazon.com has done to online retailing [in terms of speed of delivery and customizing offerings to customers] is going to happen to brick-and-mortar retailing. Mobile offers us the opportunity to do tailored marketing to customer-specific needs and to target offers to them that resonate better than anyone else’s.” — Chris Gheysens, president and CEO of Wawa Inc., CSNews’ 2013 Retailer Innovator of the Year

“We wanted to break the mold, to be perceived as a neighborhood store that is beyond the typical convenience retailer and closer to a QSR [quick-service restaurant].” — Allison Moran, CEO of RaceTrac Petroleum, CSNews’ 2012 Retailer Innovator of the Year

28 Convenience Store News | NOVEMBER 2016 | WWW.CSNEWS.COM

in its largerbox stores. Drugstore chain CVS, meanwhile, is rolling out a new ethnic shopping experience dubbed “CVS y mas” in the Miami, Fla., area. “Thinking about some of the initiatives other channels have and implementing them into convenience retailers is certainly not a far stretch,” Gross encouraged. “I think we can have ethnic assortments and ethnic banners for certain convenience retailers, no question.” Need even more inspiration? Well then, you’re in luck. Automation is yet another prime area of opportunity for future innovation in the convenience store industry. “Using vending machines as a new point-of purchase can be really impactful,’ the analyst explained. Some competitive retail channels are already dipping their toes into the automation pool, but leveraging it for sampling. For example, Walmart is testing a beauty sampling machine in a small number of Texas locations, while Sam’s Club has a membership machine in almost all its stores where a consumer can swipe their membership card and get a new sample weekly. Bottom line: Today’s fast-paced, ever-changing retail world is pushing convenience store operators — and all retailers — to keep their eyes always open and their minds always working to devise new, innovative ways to kick up the experiences they offer to consumers. Over the next four or five years, Gross predicts that several key areas will be changing for convenience retailers: trip types; meal solutions and prepared food; the future of the front end; retail health; a desire to experience; pricing and promotion; and more. Delivering on our brand promise to “Keep the Industry Ahead of What’s Next,” Convenience Store News devotes this month’s cover story to innovation. Turn the page to see the C-store Industry Inspiration Board we’ve compiled to help get your creative juices flowing. And then keep flipping to learn about how consumers define innovation, and to see the best in store design innovation and new product innovation as we present the winners of this year’s CSNews Store Design Contest and CSNews Best New Products Awards.


cover story

C-store Industry Inspiration Board

Get your creative juices flowing, using these innovative concepts as a starting point

Beverages Redefined

Amped-Up Branding

No longer just a name on the storefront, convenience stores are expanding their brands to be more like brand experiences incorporated into every aspect of the operation. A prime example of this is Kum & Go LC’s newest prototype store design. Playing off the West Des Moines, Iowa-based retailer’s slogan, “Where & Means More,” Kum & Go has built a unique convenience store experience around the ampersand symbol. Ampersands are used strategically and whimsically throughout the in-store footprint, as well as in localized artwork that sits outside each new prototype store. There’s even a Kum & Go signature doughnut in the shape of an ampersand. Taking this branding one step further, the retailer recently rolled out a new loyalty program and aptly named it, &Rewards. Kum & Go’s &Rewards program rewards customers for purchases they make both instore and at the pump; includes a pizza club; and allows members to take advantage of pop-up offers.

30 Convenience Store News | NOVEMBER 2016 | WWW.CSNEWS.COM

Are you keeping your cold vault modern and stocked with the latest in beverage category innovation? Packaged beverage trends appear to be making the jump to alcoholic beverage trends at an increasing rate these days. Boxed water has now made way to boxed sangria. At the recent 2016 NACS Show, CSNews editors met with Beso Del Sol Sangria. Imported from Spain, it comes in red and white varieties, each packaged in a 3-milliliter box, and stays fresh for up to six weeks once it’s opened, refrigerated or not. Sparking bottled water has made way to alcoholic sparkling water. From the same maker as Samuel Adams beer, Truly Spiked & Sparkling is an alcoholic sparkling water that contains alcohol made from cane sugar and comes in three flagship flavors. Carbonated soft drinks have made way to hard sodas. One line, Henry’s Hard Soda from Miller Coors, seeks to “put a playful spin on familiar flavors.” Henry’s currently comes in three varieties: Hard Ginger Ale, Hard Orange, and Hard Cherry Cola. And most recently, traditional Mexican aguas frescas are popping up in alcoholic versions. Hard Frescos, inspired by the fresh-pressed juices that are a part of Mexico’s street food culture, are naturally fermented in small batches using real fruit. And then, there’s Zumbida, which maker MillerCoors says combines a subtle sweetness and fruit flavor, with a hint of carbonation, and a touch of alcohol for a crisp, clean finish. Which packaged beverage will get “alcoholized” next?


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cover story

Convenience Curbside

Just as “convenient” for some consumers means not having to leave their homes to purchase consumables, the definition for others means not having to exit one’s car at the store. Drive-thrus appear to be gaining momentum as convenience store retailers get more advanced in the foodservice realm. Case in point: This year saw convenience store chain Parker’s open its first store offering drive-thru foodservice in Claxton, Ga.; and QuikTrip testing a drive-thru at a West Tulsa, Okla., location, having replaced a Wendy’s franchise inside the store with a QT Kitchens counter that services customers both inside and via the drive-thru. Consultant Joe Chiovera of XS Foodservice & Marketing has even called adding drive-thrus “the smartest move you could possibly make” when purchasing real estate for foodservice. If a drive-thru isn’t feasible on your lot, though, another option may be curbside pickup. C-store competitors such as CVS Express and Walmart are splitting the difference by letting customers place orders ahead of time and then drop in for curbside pickup, where the ordered items are brought directly to the customer’s vehicle. Walmart’s e-commerce division began offering this service in part to compete with Amazon.com, but now Amazon is reportedly planning to open its own brick-and-mortar grocery/convenience store/pickup locations. Everyone is seeking out ways to give consumers the easiest, quickest service.

32 Convenience Store News | NOVEMBER 2016 | WWW.CSNEWS.COM

Convenience on the Move

Who ever said convenience stores have to be stationary? With today’s consumers always on the move, Ford Motor Co. believes convenience should be, too. Through its Techstars Mobility initiative — designed to enhance next-generation mobility solutions while helping startup companies get their footing — Ford is collaborating with a startup known as Cargo, and what Cargo brings to the market is certainly of interest to the c-store industry. The New York-based company serves as an in-vehicle general store, helping ride-share drivers cater to their passengers. It provides Cargo kits, which are sent directly to ride-share drivers who purchase them, and stocked with products on-the-go passengers desire such as snacks. But why stop at a car? Why not a convenience store bus? A c-store located inside a school bus has opened at Wichita State University’s Hughes Metropolitan Complex. Open 6:45 a.m. to 9:15 p.m. on days school is in session, the c-store bus sells eight types of coffee, 18 types of cappuccino, Daylight Donuts, Coca-Cola products, energy drinks, tea, water, four types of smoothies, hot dogs, sausage rolls, chips, candy, mints and gum. Owner Kelly Fankhauser is now working with a food vendor to get sandwiches added to the lineup.


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cover story

Inspired HQs

Creative work environments cultivate creative thinking. If innovative ideas are what your company is after, then you may want to take a step back and look at your surroundings. Perhaps consider adding some outdoor features, like Kum & Go is doing in its new headquarters, which is currently under construction. Once completed, the Krause Gateway Center in Des Moines will include outdoor terraces available to Kum & Go associates as flexible work areas, an outdoor meeting space, and a rooftop garden. Inside the building, glass on all sides will provide natural, abundant light and transparency, designed to foster collaboration. If you think your employees could use a little adventure in their workdays, though, consider drawing inspiration from Maverik’s new headquarters, which it calls Base Camp. Unique features include a rock-climbing wall; elevator doors that look like mine shafts; panoramic views of downtown Salt Lake City against a breathtaking mountain backdrop; and lots of inspirational messages like Maverik’s “Live Legendary, Never Ordinary” mantra. Everything about the new home of “Adventure’s First Stop” reflects its goal of being a destination for its active, adventure-oriented core customers.

Convenience on Demand

For a growing number of consumers today, the ultimate in convenience means never having to leave the comfort of their home to buy the products they need. On-demand delivery is not about getting the customer to come to you, but rather about you going to the customer. Sheetz Inc. just recently became the latest convenience store retailer to enter the on-demand delivery space. Sheetz has partnered with OrderUp from Groupon, an on-demand restaurant food-delivery service, to allow customers of its college locations in Morgantown, W.Va., and State College, Pa., to place Sheetz orders and have them delivered to their doorstep. 7-Eleven Inc. is likewise targeting the college-age crowd with on-demand delivery. Starting Dec. 1, users

34 Convenience Store News | NOVEMBER 2016 | WWW.CSNEWS.COM

Product Mashups

Why settle for one product when you can have two in one? Enter the mashup trend. In the quick-service restaurant world, think along the lines of Burger King’s Mac n’ Cheetos, deep-fried sticks of macaroni and cheese encrusted in a Cheetos-flavored shell. Or Taco Bell’s Doritos Locos Taco, available in Nacho Cheese, Cool Ranch and Fiery varieties. In the convenience store space, 7-Eleven went mashup crazy this year around the 50th birthday of its Slurpee frozen beverage. The chain introduced exclusive, limited-edition, grape and blue raspberry Slurpeeflavored lip balms in partnership with Pfizer Consumer Healthcare’s ChapStick line. 7-Eleven also paired up with Kellogg’s Pop-Tarts brand for the first-ever, limited-time birthday Slurpee Pop-Tarts in frosted strawberry and frosted blueberry varieties. Mashups are not just popular among retailers and fast-feeders, either. C-store suppliers Hostess Brands and Mars Chocolate North America recently launched two new mashup sweet treats: Hostess Brownies made with M&M’S, and Hostess Brownies made with Milky Way.

of the Tapingo mobile app at or near participating colleges in California, Arizona, Pennsylvania, Ohio and Maryland can get delivery from select neighboring 7-Eleven stores. This is not the first on-demand delivery venture for 7-Eleven, however. The chain first entered the ondemand delivery arena in 2015 when it joined with Postmates to deliver in several major cities. And it even took delivery to new heights by teaming up with drone delivery service Flirtey to complete the first fully autonomous drone delivery to a customer’s residence this July.


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cover story

Food & Beverage Pairings

Traditionally, the practice of food and beverage pairing has most often been seen at higher-end restaurants where waiters will recommend wines to go with particular meals. However, the practice in now coming to convenience stores, as industry beverage and foodservice suppliers are beginning to partner up to double their effectiveness in the channel. Anheuser-Busch and Tyson Convenience teamed up at last month’s 2016 NACS Show to illustrate the importance of fresh food in conveEffectively getting customers from the forecourt into the nience stores and highlight how beer and food can complement each convenience store is still one of the biggest challenges for other to drive total basket volume — in particular, increasing sales of c-store retailers. However, innovation at the gas pumps is products like chicken sandwiches, pizza and hot dogs. helping retailers better interact with customers by deliverThe Coca-Cola Co. has also conducted research on pairings and ing customized, compelling content in the form of enterfound, surprisingly, that carbonated soft drinks are among the top tainment, promos, ads, games, loyalty program informathree beverage choices for breakfast food pairings, and most fretion, instant feedback, and more. quently purchased with breakfast sandwiches French toast. Technology like the Optic 12 Solution from NCR Packaging makers are getting in on the act as well, helping to appears to have come of age. The modular, self-service make the practice of pairing food and beverages even easier to solution accepts a range of payment options, including execute. With companies EMV and magnetic stripe cards, contactless, mobile walsuch as Snacktops, “food let, and 2D barcode scanning. couplers” allow prepared It’s all about the interaction at the pump and driving food packages to snap customers into the store with compelling content. And the onto a range of stantime couldn’t be riper, as retailers are facing a significant dard beverage cup sizes, expense in the coming year to upgrade their fuel pumps including coffee cups, to be EMV-capable bottled beverages, founbefore the October tain drinks, and beer. 2017 deadline when liability for fraudulent charges shifts from the card companies and banks to the retailers. Why not change this expense into an investment in innovation? Convenience store shoppers are coming to expect a higher quality of foodservice from the channel. For those c-store retailers strapped for resources, the sous vide method of cooking could offer a meeting point between efficiency and quality. Sous vide refers to cooking food slowly in a vacuum-sealed pouch at a low temperature to retain most of the moisture and flavor. Among the advantages of this cooking method for c-store retailers is the ability to offer a fully-cooked meat with less shrink and better yields, increased shelf life, improved nutrition, fewer ingredients, and consistent flavor, color, texture and tenderness. Operational benefits of sous vide include ease of execution, simple management of fluctuating traffic periods, and increased speed of order to the customer. What’s more, sous vide can be accomplished using a variety of foodservice equipment that’s already readily available to c-store operators, like convection ovens, microwaves, Turbo Chefs or thermalizers. C-stores that lack the manpower and/or expertise to offer full made-to-order foodservice programs could use sous vide as an efficient, cost-effective hot food differentiator.

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36 Convenience Store News | NOVEMBER 2016 | WWW.CSNEWS.COM


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cover story

The Consumer View How convenience store shoppers judge innovation and emerging trends at the store By Susan Durtschi, Past Times Marketing

I

nnovation is a key competitive battleground in the food and beverage categories in convenience stores. Consumers expect innovation throughout the store, but this quest for newness is especially keen in the cold vault and foodservice categories, according to consumers interviewed while judging the 2016 Convenience Store News Best New Products Awards program. Variety and excitement, whether it’s a new iced tea flavor blend or a new wrap and salad combo, is the order of the day. From gluten-free lunch options in foodservice, high-protein options, frozen beverage selections, and vegan wraps, companies have been working overtime with constant new products and product extensions in the pipeline. I was touring some convenience stores over the past four weeks, conducting focus groups as well as using some guerrilla tactics to find out how people feel about innovation. Today’s consumers define product innovation in different ways, depending on their age, gender and region of the country. For example, I asked Diane, a 31-year-old, single woman from Westerville, Ohio, to pick out a food or beverage in a c-store that she felt was innovative. She chose a Rubicon No-Sugar-Added Exotic Juice can in mango. “I am always looking for juices without added sugar,” she said. Meanwhile, James, a 26-year-old from Exton, Pa., showed us his order of a mac-and-cheesesteak sandwich with extra jalapenos. He loved the mash-up of two of his favorite foods. Beyond food and beverages, consumers are cognizant of other innovations that improve the ease and speed of service at c-stores. Things that were mentioned more than once included:

38 Convenience Store News | NOVEMBER 2016 | WWW.CSNEWS.COM

• • • • •

Guest Wi-Fi services; Touchscreen monitors for food ordering; Digital signage with targeted promotions; Self-serve checkout; and Local community-targeted promotions and charity events publicized through social media. Joey, a 37-year-old from Syosset, N.Y., brought up the free things, like special lunch deals, he got through the c-store’s Facebook page as a smart innovation. Here is a sampling of some additional consumer comments about innovation in c-stores: “Iced pumpkin spice doughnuts are the bomb.” Fred, age 52, divorced male, Chicago “The pizza deal keeps me coming back.” Jose, age 25, married male, Atlanta “I’m always goin’ for the hottest, spicy chips.” Jack, age 29, single male, Orlando, Fla. “Coffee variety — never seen so many different varieties in a c-store before.” Jeanne, age 33, single woman, Woodstock, Va. “We’re always looking for new snack bars.” Sonya, age 24, single woman, New Brunswick, N.J. “The water flavors are my favorite, especially the fizzy raspberry lemonade.” Jewel, age 31, divorced woman, Richmond, Va. Susan Durtschi is president and CEO of Past Times Marketing, a consumer research firm. Convenience Store News partners annually with Past Times Marketing to conduct its Category Captains and Best New Products Awards competitions. For more information, go to pasttimesmarketing@gmail.com.


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cover story

More Than a Store

This year’s CSNews Store Design Contest winners are all about the experience

I

t’s one thing to have an attractive store that grabs the attention of motorists driving by. It’s another thing to have an attractive store that delivers an in-store experience unlike anything else consumers have ever encountered at a convenience store. The winners of the 2016 Convenience Store News Store Design Contest achieve both — with flair. Now in its 11th year, the awards program honors

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

new and rebuilt c-stores whose designs excel in areas such as branding, interior layout, use and effectiveness of signage and logos, and exterior property and landscaping. Construction or remodeling of eligible stores must have taken place between January 2015 and April 2016. Winners were selected based on innovation, creativity, and the positive impact of the design and/or remodel on the retailer’s overall business. This year’s honorees, spanning six categories, are:


cover story

Best Original Design

Winner: Kum & Go LC, Johnston, Iowa Designer: CBX & BRR Architecture The debut location of Kum & Go’s new Marketplace store prototype boasts a brand-centric, stylish design with upscale features that benefit customers and store associates alike. Designed to be a physical representation of Kum & Go’s brand promise, “Where & Means More,” ampersands appear as surprising accents throughout the Johnston, Iowa, store. This includes on door handles, hanging from the open kitchen ceiling, and even an 8-foot-tall ampersand sculpture outside the store that is a “love letter” to the city of Johnston. Foodservice was a major focus during the design process. The expanded, open food preparation area is the centerpiece of the 6,200-square-foot store and captures guests’ attention from the moment they step inside. Customers can enjoy an elevated food experience with Kum & Go’s Go Fresh Market, which features new salads, made-to-order sandwiches, pastries, pizza and more. Associates face customers while preparing food in the clearly visible workspace, and a personal touch is added when they serve pizza directly to customers. The store also has built-in open coolers and warmers, along with a roller grill that is recessed into the countertop, to decrease visual clutter. Beer aficionados can visit both the 300-square-foot beer cave, and the Growler Station that features fresh beer on tap. With Marketplace, Kum & Go also makes a point of offering customers more than they expect from a convenience store in the form of: freshly baked bread; indoor and outdoor seating; complimentary Wi-Fi and charging stations; and an express checkout for peak times.

Best Original Design

Honorable Mention: Parker’s, Ridgeland, S.C. Designer: API+ The bright, fresh design of Parker’s No. 55 in Ridgeland, S.C., is meant to align with the chain’s new “Fast Fresh Friendly” branding campaign. The primary goal for the 4,000-square-foot prototype store was to create a unique, proprietary experience inside and out that is supported through its “design vocabulary” of architecture, materials, color palette, signage and communications. Parker’s other objectives were to enhance convenience and expedite the speed of transaction for customers at the fuel pumps, point-of-sale and drive-thru. The retailer also wanted the form and materials of its new design to be timeless rather than trendy, so as to not become quickly outdated. Outside the store, a unique arching pylon sign was designed to convey the visual impression of speed and convenience. Inside, even more elements reinforce this impression, such as the beverage center design that reflects the exterior arch. Layout solutions were created to improve customer flow and speed of checkout. Plus, lowered soffits above reach-in beverage doors and beer coolers create organization and further efficiency for hurried shoppers. Since its March 2016 opening, the store has become one of Parker’s most successful locations. Along with continuing to capture both business and leisure traffic, the store services the boating community in nearby Callawassie Island by offering marine fuel on-site.

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


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Best interiOr Design

Winner: Grab.n.Go Food Mart, Marshall, Texas Designer: Paragon Solutions The redesign goal for the 5,325-square-foot Grab.n.Go store in Marshall, Texas, was to create a store interior that is both impactful and vibrant. The colorful results provided exactly that. Designers created an eye-catching theme through the store’s repeated use of circles and colorful finishes of modern-day pop art. This motif complements the dark walnut wood that is intended to ground the circular clouds that float above the checkout counter. To provide a contrasting palette, designers installed brick walls alongside “verdant green and tomato red” colors for an unexpected balance of charm and intrigue. Bright graphics and whimsical signage add to the welcoming, playful feel while providing clear guidance to customers. Even outside the store, the strong linear elements of muted brick and horizontal metal facing work to ground the colorful offerings that await customers just inside.

Best sky’s the limit remODel Winner: All-N-1, Campti, La. Designer: Paragon Solutions

Following its remodel, All-N-1 is not just a convenience store; it is a painting brought to life in the form of a store, according to the designer that worked with owner Glenn Moffett of Moffett Oil Co. to not only renovate the Campti, La., location, but also expand it. The new store spans 3,806 square feet vs. the original store of 2,690 square feet. To give the new All-N-1 a vibrant Louisiana flavor with lots of personality, the redesign features bright pops of color that are complemented by wood plank finishes and industrial brushed metal signage. The result is a store design that is “spectacular in color and movement,” according to the designer Paragon Solutions. In particular, the artistic designs on the checkout counter and the bathroom doors add beauty and class to the store’s interior. Customers can feast on the décor along with the foodservice offerings at the store. The existence of a Papa John’s pizza location inside was an extra challenge during the design process, as the final result had to work well with the quickservice restaurant’s branding. Ultimately, All-N-1 now has a distinctive look that makes it an attractive and fun place to shop.

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


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Best sky’s the limit remODel Honorable Mention: Dirt Cheap, O’Fallon, Mo. Designer: Paragon Solutions

The Basement Brand Liquor Store division of U-Gas had a well-established “Dirt Cheap” store brand, but the company didn’t spare any expense when it came to planning the rebranding and refreshing of its store prototype. The building in O’Fallon, Mo., started out with unusual origins for a retail store, as the 5,500-square-foot location originally operated as a Mexican restaurant, complete with a wraparound porch. Design firm Paragon Solutions worked with U-Gas to give Dirt Cheap a new, clean, modern look for both the interior and exterior of the building. The new prototype keeps the personality of the branding fresh, playful and fun. Outside, the primary use of gray paired with bright red at the awnings and entrance draw attention to the eye-catching bathing-suit-wearing chicken logo of Dirt Cheap. Inside, concrete floors have an industrial shine, but touches such as Zebra wood, subway tile, neutral counters and bold black, red and white pops offset this. Signage is clear and eyecatching while adding a sense of fun at departments like the Fizzy Fizz “Oh Yeah!” fountain drink station. The main challenge was to keep the Dirt Cheap brand’s essence intact while giving its image a facelift. Along with the visual updates, the prototype introduces new features such as wine tasting, a smoke shop and a drive-thru to make this a must-visit location.

Best miD-BuDget remODel Winner: Tang Mart, Attalla, Ala. Designer: Paragon Solutions

When it came time to remodel his Attalla, Ala., convenience store, Jonathan Tang of IRA Phillips Inc. wanted an out-of-the-box design that embraces and celebrates his Chinese heritage. Working with Paragon Solutions, Tang and the designers created a brand, Tang Mart, which can best be described as approachable, friendly and contemporary. The brand’s “dragon” icon embossed in rich blue and lime green colors is a simple yet memorable mark that gives the store a fun personality, much like its owner. It is hard to believe the before and after photos represent the same space, the designers said, as the remodel (plus an addition) resulted in a complete 180-degree turn from the original state and transformed this store into a much-improved customer experience. An added bonus feature of Tang Mart is a designated pet relief/ play area outside, which is still a unique amenity for a present-day convenience store.

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Best miD-BuDget remODel

Honorable Mention: Lone Star Food Stores, Van Alstyne, Texas Designer: Paragon Solutions Bill Douglass, the head of his family-owned business Douglass Distributing, had an 8,250-square-foot convenience store in Van Alstyne, Texas, in desperate need of remodeling. He desired a clean, contemporary design that was warm, inviting and tied into the local community. Douglass worked with design firm Paragon Solutions and his daughter Diane McCarty to come up with a store that would make both of them proud. The interior is comprised of Texas colors — red, blue and white — with complementary neutrals and a repeated star logo. Also inside the store, modern pale stone finishes and brushed nickel accents combine with medium-brown/dark cabinetry. Similar to glowing gems, opulent red pendant lights hang over the expansive counters. And to help cement the local community bond, a mural above the coolers is comprised of photos taken in the Van Alstyne area by Lone Star staff. Adding even more sparkle, red glass tile with an opal sheen can be found wrapping its way around upper counters and backsplashes. During the daytime, steeped skylights perform double duty as points of interest and additional lighting. Store amenities include a beer cave, Subway restaurant, and a Burger King restaurant with contemporary seating and ample natural light flooding the space.

Best travel Center Design Winner: Kwik Stop, Peosta, Iowa Designer: Hussmann

Looking for an innovation interior design for its new location in Pesota, Iowa, Rainbo Oil Co. reached out to design firm Hussmann to create a travel center with an emphasis on fresh store bakery and prepared foods — in a unique, yet utilitarian retail environment. With a modest Midwest budget, the design philosophy was to “keep it simple,” while creating floor plans that are intuitive and fluid. Utilizing the interior wall structures and creating a complementary color palette, the retail and service areas were defined. The process did come with some challenges, including creating a transaction that would accommodate essentially four entries into the store. Now achieved, the transaction provides Kwik Stop employees with the opportunity to extend greetings to their customers of both the c-store and the Fazoli’s restaurant that they also operate. As the end result shows, the store is open enough for the customer to visualize the entire merchandising area from just about anywhere, once they step inside. The majority of the focus has been placed on the made-to-order food program.

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Best travel Center Design

Honorable Mention: Kings Mahwah, Mahwah, N.J. Designer: Bolla Oil Corp. At its first site in New Jersey, Bolla Oil Corp. wanted to not only introduce the company to local customers, but to grab their attention. “We wanted to completely wow the customer base and let them know who Bolla is,” said store owner Harry Singh. The company redeveloped the two-acre property to boast two fueling areas, both carrying the Sunoco brand, with 12 multipurpose fuel dispensers for gas and diesel, plus an additional five multipurpose fuel dispensers under a separate canopy for diesel/DEF customers only. The site also features the 35th Bolla Market location. The 5,000-square-foot store offers a gourmet deli, full-service coffee, a 13-door cooler, luxurious bathrooms, and seating for more than 30 guests. The c-store has a second story that is used for storage, accounting activity, and office space for vendor and team meetings. Bolla Oil was concerned its trucking business would impact traffic flow to the gas pumps and to the c-store. However, Singh said, “Fortunately, we have been able to manage the volume effectively.” Only six weeks after opening, Kings Mahwah was already exceeding gasoline, diesel and convenience store goals, he reported. “Our goal was to become a destination for commuters, travelers and locals, and so far we have achieved this goal, but will continue to offer this luxurious experience to all our customers.” Singh added.

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For all features and to see the solution in action, visit www.axis.com/f34-system 50 Convenience Store News | NOVEMBER 2016 | WWW.CSNEWS.COM


Best internatiOnal Design

Winner: ZOOM, Dubai, United Arab Emeritus Designer: Emirates National Oil Co. Located in the lobby of the tallest building in the world, the Burj Khalifa ZOOM store in downtown Dubai is 1,250 square feet, with elegant wood finishing that elevates the brand aesthetics and complements the sophisticated décor of Burj Khalifa. The objective was to cater to a diverse customer base made up of various demographics, including the residents of the building’s 900 apartments; guests of the Armani Hotel, which is within Burj Khalifa; employees who work in the commercial offices that span the 163-floor site; and the staff operating within the tower. Another catch: The tower management wanted the design to differ from the standard ZOOM store of Emirates National Oil Co. Foodservice plays a critical role in the Burj Khalifa ZOOM store, with customers demanding fresh and quick service on the go. A partnership with Starbucks has proven to be a hit with the tenants, and it complements the store’s fresh bakery counter. Additionally, ZOOM acquired separate storage space within the tower to carry sufficient stock to feed into the shop, as well as for direct home delivery within the tower. This helps to overcome the limitations of the smaller store footprint.

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Tapping Into Today’s

CONSUMER TRENDS

CSNews honors 17 top new products of the year during the NACS Show BY SUSAN DURTSCHI

I

nnovation is alive and well among companies that make products for convenience stores. This year, for the 20th time, Convenience Store News recognizes and honors the makers that exemplify the best quality and innovation in new products. The latest trends are all represented here: small bites, healthy snacks, low sugar, high protein, global cuisine inspiration, grab-and-go convenience, nostalgic treats, and more. Today’s timetables for work, play and eating continue to shift. The new normal is all-day snacking with a beverage nearby, interrupting the ritual of any sort of traditional mealtime. This “purposeful snacking” has taken over the day and is great for the convenience store business. Another shift is being seen in consumers’ attitudes about being healthy, moving away from restrictions. It is not about good food vs. bad food. It’s about having a small treat, and transparency of the ingredients in that treat. It’s about balance, as well as fun. Convenience store shoppers today are instantaneous decision makers. Speed has become more of a driver in consumers’ choices. Every day, consumers vote with their wallets for the products that fulfill their on-the-go needs. And, in the 20th annual CSNews Best New Products Awards contest, consumers voted for the favorite products among scores of new items introduced into the convenience channel in the past year. After a month of testing, consumers chose 17 winners that were recognized during the NACS Show in Atlanta last month. Judging for the 2016 CSNews Best New Products Awards was supervised by Past Times Marketing, a New York-based consumer research and product testing firm. Contest entries were rated and awarded points by consumers based on the criteria of taste, value, convenience, healthfulness, ingredients, preparation requirements, appearance and packaging. This year’s best new products are:

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ALTERNATIVE SNACKS:

Duke’s Chorizo & Lime Smoked Shorty Sausages Let’s face it, Americans love their meat snacks, and millennials are all over this new one. Duke’s Chorizo & Lime Smoked Shorty Sausages from Thanasi Foods brings a delicious, high-protein, better-for-you option to c-stores. Duke’s is disrupting the dried meat snacks category by offering the first-to-market, freshly crafted smoked meats with real, whole ingredients (rather than just dried spices) and minimal sugar. The products are made in small batches with fresh, never-frozen meats and freshly chopped fruits and vegetables. Duke’s meats are slowsmoked over real hardwoods such as avocado wood, bourbon casks and redwine barrels before — in the case of the Smoked Shorty Sausages — being hand-hung and dried for days. The upscale packaging for the 1.25-ounce size and $1.99 price point received high marks from our testers.


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CANDY/CHOCOLATE: Snickers Crisper Reinventing a Snickers bar is a daunting proposition, but Mars Chocolate North America nailed it. Snickers Crisper, an indulgent new chocolate candy offering, was a favorite of our testers. With multiple textures and crunch, Snickers Crisper is a winner. It satisfies with the delicious combination of crisped rice and peanuts topped with a layer of caramel and coated in creamy milk chocolate. Consumers’ desire for new textures has resulted in a new crispy/ crunchy segment within the chocolate candy category, and it is growing rapidly. There is one serving per pack, with two square segments. Each piece is 100 calories, allowing buyers to have one snack for now and another for later. Consumers love the option of small bites, even if they don’t have the willpower to leave any candy for later. Also, snacks boasting 200 calories or less are a touchpoint for consumers today, and this one is candy bar perfection. CANDY/GUM: Dentyne SubZero Gum Iceberg Mint Breath freshening is the key reason c-store shoppers go for gum and mints. Dentyne SubZero Gum appeals to consumers who prefer strong and intense breath freshening. This gum is extra minty and creates a cool sensation in the mouth — it has the intensity meter set on high. Dentyne SubZero Gum is a serious blast of cold, with the added bonus of being sugar-free. CANDY/MINTS: Ice Breakers Cool Blasts Chews Mints have been chewing into gum sales lately and Ice Breakers is part of the reason. Ice Breakers Cool Blasts Chews are a rapidly dissolving chew that looks like a soft, square piece of gum. The product releases a cool blast of instant freshness the minute it hits the mouth. The chews feature cooling crystals, which provide fastacting and long-lasting breath freshening effects. The rapid dissolve allows people to quickly and discreetly use them before and during social interactions. Our testers thought they were magical, and also liked the clever container.

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CANDY/NON-CHOCOLATE: Sour Patch Strawberry

Resealable Standup Pouch Sour Patch candy has a cult following, which has made it the No. 1 sour candy in the market. In the beginning, Sour Patch Kids were shaped as martians to capitalize on the space enthusiasm of the 1970s. They then transformed into children to capitalize on the Cabbage Patch Kids craze of the 1980s. Now, the brand introduces the “sour then sweet” candy in a strawberry shape. The new flavor was highly anticipated and has been a big hit. Also, the standup, resealable pouch packaging is new to the brand and proving very popular. Sour Patch Strawberry is the perfect candy for sharing, or as a midafternoon snack. One of our panelists was so excited, she said: “Twice the size of the regular Sour Patch Kids” and “true” strawberry flavor. Maker Mondelez International Inc. keeps to the tradition of generous sugar coating and flavor on these new candies.

CIGARS: Swisher Sweets Wild Rush Cigarillos Wild Rush is a limited-edition cigarillo that blends the flavors of sweet fruits and watermelon. Swisher Sweets reintroduced Wild Rush based on the success of the original launch. The cigarillos come packaged in resealable, two-count foil pouches with Swisher Sweets’ “Sealed Fresh” guarantee. They are offered in “2 for 99 cents” and “Save on 2” price points. As one of Swisher’s most popular blends, Wild Rush has provided double-digit growth since February in all its convenience store outlets, according to the brand. FOODSERVICE/BREAKFAST: Hot ‘n’ Ready Square Wrap

Exciting new breakfast sandwich ideas are key for c-stores, which are facing increasing competition for the morning customer. AdvancePierre Foods came out with an outstanding new offering from its Hot ‘n’ Ready line. The Hot ‘n’ Ready Square Wrap is a square tortilla packet filled with pork sausage, topped with cheese and a fluffy egg omelet made with green and red bell peppers with flavorful seasonings. It can


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be microwaved on-demand from the cold case or served hot in the sandwich warmer. The key to this breakfast sandwich is its flavor and packaging; it is wrapped in quality paper. Our testers were impressed by the fresh flavors and easy-to-hold concept of this square wrap. The sandwich did not fall apart like other tortilla wraps. The quality and value for $2.49 was viewed as a positive factor, too.

FOODSERVICE/LUNCH: Tyson Chicken Sandwich

Spicy flavors are on fire, with more than 50 percent of consumers today saying they prefer hot or spicy foods and sauces. The Tyson Chicken Sandwich is available in original (topped with cheddar cheese) or spicy (topped with pepper jack cheese) to meet this trend. Both sandwiches feature juicy, tender chicken and have a great texture. Our testers thought that both offerings were hearty, flavorful, and the soft bun did not get soggy after heating. Tyson’s butcher-wrapped sandwiches for c-stores keep getting better and better.

EDIBLE GROCERY: Zukti Tamarind Sauce

Millennials get a lot of attention from all sorts of people trying to figure them out. They are unpredictable and spontaneous. Nine out of 10 millennials prepare dinner at home three or more times per week, but they do not follow their mother’s recipes from the Betty Crocker cookbook. They experiment with unique ingredients, especially ones with health benefits. There has been major growth in the popularity of tamarind to the Western world because of its unique taste and major health benefits. Zukti Tamarind Sauce can be used in a wide range of dishes. The tangy sauce is made with tamarind pulp and all-natural flavors. There are no additives or artificial food coloring. The “ketchup of the East” is a tasty, convenient, sweet-and-sour sauce based on an ancient Indian recipe. This product was prepared several ways for our testing panel — the most popular were as a dipping sauce for chicken nuggets, a salad dressing, and for marinated chicken wings. Our testers’ comments included: “mouthwatering” and “such a quick prep.”

HEALTH & BEAUTY CARE: Systane Ultra In the blink of an eye, consumers are seeking out emergency solutions for dry eye in the health and beauty care aisle of their local c-store. Research shows one in eight

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

American adults suffers from dry eye, and while it is one of the top-selling eye care segments in other markets, dry-eye products are not often available on c-store shelves. Lil’ Drug Store Products, however, now distributes Systane Ultra to convenience stores. Systane Ultra is the No. 1 doctor-recommended solution for the treatment of moderate dry-eye symptoms. Our panelists were quite familiar with Systane Ultra and it received high praise for its effectiveness. Of all the health and beauty categories, consumers are most brand-loyal in eye care — 42 percent say they would leave a store to find their preferred eye care brand.

HEALTHY SNACKS/BARS: Mediterra Savory Bar With Kale & Pumpkin Seeds Consumers these days love healthy, on-the-go nutrition bars, but not all of them want sweet bars. Mediterra Savory Bar ingredients are native to the Mediterranean region, and the bars adhere to the Mediterranean Diet, considered by scientists to be one of the healthiest lifestyles in the world. With low sugar and plant-based pea protein, the Mediterra Savory Bar With Kale & Pumpkin Seeds has only has one gram of sugar (from honey and fruit) and provides healthy, on-the-go convenience. It’s real food — you can see the fruits and seeds in the product. Our testing panel was pleasantly surprised by this bar. They thought the size was perfect, and liked the satisfying texture, flavor and the fiber content. HEALTHY SNACKS/PEG BAGS:

Rockin’ Ranch Chickpea Snacks Boasting the cool creaminess of traditional ranch, combined with a slight kick of tang, Rockin’ Ranch Chickpea Snacks deliver big flavor and vegetarian-friendly nutrition. At 120 calories, 5 grams of protein and 24 percent of the recommended daily value of fiber per serving, these flavorful roasted chickpeas feature the trifecta of high protein, fiber, and significantly less fat than nuts or chips. “Power snacking” has been getting a lot of attention recently and this new product from Biena ticks all the boxes. Our panel thought it delivered the “best of both worlds” in regards to taste and nutrition. They also liked the 1.2ounce size and $1.69 price.


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NON-EDIBLE GROCERY:

Tidy Cats 4-in-1 Strength Lightweight Cat Litter Cat litter is heavy and takes up lots of shelf space. The small size of Tidy Cats 4-in-1 Strength Lightweight Cat Litter from Nestlé Purina Petcare addresses the space constraints of convenience store operators, and is convenient for the consumer to handle. The plastic jug weighs only 6 pounds, but is equivalent to 14 pounds of the leading competitor litter. It controls ammonia, urine and fecal orders, and provides powerful clumping. This product got five stars from our panelists for its lightweight portable container, clumping power, and “no dust” action.

OVERALL INNOVATION: Skippy P.B. Bites

Hormel Foods, maker of the Skippy brand, has taken peanut butter beyond the jar with Skippy P.B. Bites, a satisfying, portable, pop-in-your mouth, round ball snack with a crunchy center and soft, non-sticky peanut butter coating. Containing 5 grams of protein per serving, Skippy P.B. Bites give a boost of energy in a unique style and shape. They come packaged in a convenient, portable plastic container so you can keep one in your car, office desk or school backpack. Our group of testers liked the size of the snack ball, as well as the texture, flavor and $2.89 price point. They kept saying how “fun” they thought Skippy P.B. Bites are. Plus, they liked that this is a high-protein alternative to the cheese stick or yogurt snack. Of the two varieties, pretzel and double peanut butter, our testers liked the double peanut butter best.

PACKAGED SWEET SNACKS:

Mrs. Freshley’s Peanut Butter Cupcakes Mrs. Freshley’s Peanut Butter Cupcakes leverage the perfect pairing of peanut butter and chocolate, making for a sinful snack that is also budget-friendly. The intense flavor duo is packed into a perfectly portioned treat, enticing those customers looking for a small indulgence. Mrs. Freshley’s Peanut Butter Cupcakes are moist and flavorful, with a fluffy center. Nostalgic cupcakes are a great sweet treat for

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

sharing, according to our testers.

SALTY SNACKS: Honey Roasted

Chipotle Flavored Peanuts The Carolina Nut Co.’s slogan is: “These aren’t your normal nuts!” And our panelists agreed, with one remarking: “They are better!” Our testers spent a lot of time trying all the varieties and settled on the Honey Roasted Chipotle Flavored Peanuts as their favorite. The sweet and spicy flavor was curated just right, and the nuts are the perfect size. Plus, the packaging is convenient, portable, and boasts a long shelf life. They come in a resealable bag with an attractive price point of $2.49 for 4.5 ounces. These nuts scored high points for price, quality and flavor. For both everyday shoppers and the evergrowing millennial demographic, this is a healthy and nutritious protein-powerhouse snack that delivers high levels of vitamins and minerals.

WINE: Barefoot Refresh Spritzer Cans

No corkscrew required, canned wine is now competing for room in c-store beer coolers. Barefoot Refresh Spritzer Cans are able to go many places where glass wine bottles are not welcome. With a sleek, fit-in-your-hand, single-serve design, they are fun and pack easily into ice chests. This wine spritzer from E.&J. Gallo Winery satisfies the alcoholic beverage drinker who wants options: over ice, mixed in a cocktail, or straight from the chilled can. Our testers were very familiar with the Barefoot brand, so name recognition was a big plus out of the gate. They tried both the Summer Red and Crisp White varieties and liked them equally. The words “refreshing” and “fizzy” were used more than once. One tester said, “This is perfect for us at the beach.” Seen as a value at $2.49, Barefoot Refresh Spritzer Cans provide a nice bridge from a beer consumer to a wine consumer, and give drinkers the freedom to enjoy wine at almost any time and place. CSN

Susan Durtschi, an experienced buyer and product development specialist for both brick-and-mortar and online retailers, is president of Past Times Marketing, a consumer research firm. For the seventh consecutive year, Convenience Store News partnered with Past Times Marketing for the Best New Products Awards. Past Times works via focus groups and through online surveys with consumers across the country to judge new products. For more information, go to www.pasttimesmarketing.com.


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FOODSERVICE

Category Trends + Insights from

TRENDSIGHTS

Whatâ&#x20AC;&#x2122;s Behind Foodservice Lunch Visit Declines? Of all the main meal dayparts, this one is experiencing the steepest decline

F

oodservice lunch, which accounts for a third of all foodservice traffic, has posted consecutively steeper declines over the past six months. In the quarter ending June 2016, our CREST foodservice market research showed that lunch visits declined by 4 percent compared to the same quarter a year ago, the steepest decline of all main meal dayparts. By Bonnie Riggs Restaurant Industry Analyst, The rise in employees working The NPD Group at home and more shopping online, www.npd.com which cuts down on foodservice meal and snack breaks, have been contributors to the softening of lunch traffic. Plus, recent menu price hikes

Source: The NPD Group

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have steepened lunch visit declines. All restaurant segments, with the exception of traditional quick-service restaurants (QSRs), are losing visits. This is particularly true of casual dining and fast-casual restaurants where traffic was down in the quarter ending June compared to the same quarter last year by 6 percent and 9 percent, respectively. Quickservice retail, under which convenience stores fall, saw a 4-percent decline in lunch visits. Foodservice lunch, especially weekday visits, has already been negatively impacted by a 24-percent increase over the last decade in the number of people working from home, and an 8-percent increase in online shopping over the last year. Relatively recent menu price hikes have only worsened


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FOODSERVICE

Category Trends + Insights from

the situation. A pricing analysis done by NPD Group found that the “sweet spot” price point — at which consumers are most satisfied and most likely to visit — is when they feel it is “affordable to eat there often” and a “good value for the money.” Average lunch eater checks in the quarter ending June 2016, which at some restaurant segments increased by as much as 5 percent compared to the same quarter a year ago, have moved upward beyond consumers’ “sweet spot” price, thus diminishing customer satisfaction and their intent to visit. The average eater check at quick-service retail foodservice increased by 4 percent to an average check of $4.69 in the quarter ending June 2016. Traditional QSRs, influenced by recent deal activity, saw lunch eater checks increase by 3 percent in the quarter to $6.40. There has been aggressive dealing, like combo and value meal offerings at quick-service hamburger restaurants, and this dealing has prevented steeper lunch visit declines. However, NPD foodservice market research shows that only about a fourth of lunch customers took advantage of the deals. When deal traffic is removed from the lunch check, consumers are paying, on average, $8 for lunch, which is higher than most want to pay for a quick-service lunch. Simply said: Who can afford to go out for lunch on a regular basis when checks have risen for some as much as they have recently? Historically, foodservice lunch has been the occasion where consumers didn’t want to invest a lot of time, money or energy into this meal. It’s apparent by the drop in lunch traffic that the current value proposition isn’t meeting these needs. CSN


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Marketing by Mindset C-stores can boost candy sales by focusing on consumer emotions and special occasions By Angela Hanson

C

andy is one of the categories most associated with convenience stores for obvious reasons — its highly impulsive nature makes it a great fit for individuals who are making a quick stop at a c-store, and its portability makes it easy to consume while on the road. Increasingly, candy suppliers are also marketing products by tapping into specific occasions, special events and consumer emotions, and likewise c-store retailers can capitalize on this for increased sales. “Usually, our promotions encourage consumers to spend time with friends and family. We call these ‘key moments,’ as people come together to celebrate and share time together,” said Larry Lupo, vice president of sales at Mars Chocolate North America for the grocery, convenience and drug channels. Key moments can involve special dates such as holidays, special occasions such as the Super Bowl or other sporting events, blockbuster movies, and more. Upcoming key moments Mars Chocolate is incorporating into candy

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promotions include the 2017 Super Bowl, for which Wrigley and Mars will introduce their second jointselling program, the “Candy Bowl”; a NASCAR sponsorship built around the “Celebrate Race Day with M” campaign; and a team-up between the Snickers brand and National Football League. Along the same lines, fellow c-store candy supplier The Hershey Co. made a move toward the emotional earlier in 2016 when it unified its entire portfolio of products under a single campaign that taps into the emotional connection consumers have with the overall Hershey’s brand. The “Hello Hershey” campaign is founded on the idea that happiness is a choice and Hershey’s products can facilitate sweet, intimate and personal moments of happiness. The first ad in the campaign, “My Dad,” depicted a father and daughter who were brought together by the little girl’s favorite treat of chocolate milk and s’mores.


Outpacing Category Performance in Convenience Sales Up 15.1% dollar sales % change vs. prior year, total gum front end -1.4% vs. year ago

avors

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“Rather than take center stage, Hershey’s products become part of the storyline that helps spark these moments, and the focus becomes simple moments of connection,” the company explained. Seasonal candy, particularly themed around holidays, is also a major area of opportunity for c-stores. While sales of seasonal candy based around Valentine’s Day, Easter, Halloween and Christmas have grown in recent years, there is still considerable room for growth in the convenience channel as it is significantly under-leveraged in seasonal chocolate sales. “Americans love the seasons and holidays, and they go to great lengths to make their celebrations extra special. Each season has a unique appeal, connecting to shoppers’ emotions differently,” according to Lupo. POSITIVE ASSOCIATION, POSITIVE SALES

Taking it one step further, some successful candy marketing programs ask consumers to get invested, strengthening their connection with that brand even more. One example is the summer 2016 Wrigley campaign that asked consumers to choose between original flavors and sour varieties of Skittles, Starburst, Juicy Fruit, Orbit and Eclipse. This tied in with the Marvel film “Captain America: Civil War,” which saw two groups of superheroes facing off. Consumers could choose one type of candy over the other and declare which team they were on. Tie-in opportunities don’t have to be limited to just one time period, however. C-stores can stock candy products that are designed to appeal to the

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emotions consumers associate with particular properties without being limited to a short-term campaign. CandyRific, which offers a wide range of novelty confectionery based on movies and well-known brands, “works to build in play value and imaginative play into our products,” said Clark Taylor, vice president of sales. In particular, the supplier seeks to evoke “feelings of joy and excitement” through its products, thus creating a positive association for the consumer — an association that endures. While c-store candy suppliers do their part to bring connection opportunities to their retailer partners, it is important for the retailers themselves to do research and understand the emotions that drive their specific customer base to make the candy choices they do. Armed with this localized knowledge, Mark Krull, senior manager, Go2Market for Hershey, advises that c-stores can then make use of certain instore tactics to coordinate with suppliers’ advertising spots and, in turn, get the strongest returns possible. Krull recommends that c-stores with loyalty apps load content into the app for the products that are currently being promoted through events or emotionbased advertising. This will help build trial and awareness. The point-of-sale (POS) is also a prime point of strategy. Having an impactful POS with a cohesive, engaging theme is an effective way to connect with shoppers. C-store operators shouldn’t just sit back and wait for suppliers to launch the next promotion. Yearround, retailers can drive confectionery sales in three ways, said Lupo: • By communicating to consumers before they’re in-store; • With merchandising displays and aisle flow once in-store; and • With adjacencies of complementary categories, such as placing chocolate bars by the store’s beverage coolers. CSN


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STORESPOTLIGHT Fuel-Free Conveniece Stores

Going Within Some big names in convenience are opening new stores without fuel, counting on a strong in-store offering and fresh food to attract and retain customers By Tammy Mastroberte

W

hile convenience stores throughout the United States continue to expand and strengthen their in-store offerings, particularly around foodservice programs, the majority still offer motor fuels to add extra profit and help drive traffic inside the store. Even industries outside of the c-store arena, from big-box retailers to grocery stores, continue to add fuel pumps to their retail sites to offer consumers more amenities. So then, why would c-store companies like Kwik Trip Inc., QuikTrip Corp., Sheetz Inc. and Maverik Inc. start opening stores without fuel? It comes down to location and offering a strong enough in-store selection to stand on its own. “To open a store without gasoline has been part of our strategic plan for some time, but it had to be the right timing and the right location,” said Mike Thornbrugh, spokesperson for QuikTrip, which operates more than 700 c-stores in 11 states and opened its first store sans fuel in downtown Atlanta this June. “The store in Atlanta was the right time and location, and a good opportunity for us to see if it will be successful and to learn from it.” As part of the retail space of Viewpoint Condominiums, the 3,500-square-foot QuikTrip store

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

QuikTrip’s new downtown Atlanta store is in a high-traffic area, with a lot of pedestrians walking, running and cycling by.

in downtown Atlanta offers a range of grocery items, as well as fresh foods through the QT Kitchens made-to-order concept. This store is focused even more on the fresh food side of the business than other locations, Thornbrugh noted. “Placing a lot of emphasis on fresh food will give us a chance to bring a lot of different products in; to see if we can perfect it and learn from it,” he said. “A lot of people don’t remember, but QuikTrip began as a grocery store that opened and operated for many years before we even got into gasoline.” Another convenience chain opening stores sans gas is Sheetz, based in Altoona, Pa., and known for its “convenience restaurant” concept. During a recent speech


to the Carlisle Rotary Club in Carlisle, Pa., Louie Sheetz, a long-time company executive and now member of the board of directors, explained how this is the direction the retailer is headed in for the future. Sheetz already has a full-scale convenience restaurant operating in Altoona, and opened two Sheetz Cafés in Morgantown and State College, Pa. Another location without gasoline was slated to open this fall in Indiana, Pa. “We have the two cafes that are totally food focused and don’t offer gasoline,” Tarah Arnold, public relations manager for Sheetz, told Convenience Store News. “Morgantown opened in spring of 2015 and State College opened in fall of 2015. Maverik’s first non-gas store is on the ground floor of its new headquarters building in downThey have been incredibly successful due to town Salt Lake City. the location of the two cafes in two college towns and the loyalty of our Sheetz customers for our gas on the lot,” Arnold explained. “Offering quality food offering.” products at an affordable price and creating a loyal base of passionate customers is a key component.” Sheetz leverages the strength of the standalone ATTRACTING CUSTOMERS WITHOUT A FORECOURT c-store and competes very well with quick-service resIn today’s market, making money on gasoline sales is taurants (QSRs), according to Strenk. “They have such not always guaranteed, but it can still deposit cash to a strong c-store offer, and there may be locations that the bottom line. The sale of motor fuels can also be a significant traffic driver to convenience store locations. would be viable for that type of offer that don’t have “Gasoline makes a significant contribution to c-stores and big-box stores as it’s a product “In every scenario, you need to figure out what every single customer needs, and they need your strategy is for a particular location and how to it every week,” said Mark Whitehead, first vice chairman of the Petroleum Marketers profit there. If that includes gasoline, then great. If Association of America. Those c-store retailers who are moving into not, then that is fine, too. There are myriad of produrban locations and stores without space for ucts and services that may or may not be included gasoline all have very strong and compelling in a particular site, and gas is just one of them.” offers in-store, he explained. “All of these chains are leaders in the — Mark Whitehead, Petroleum Marketers Association of America c-store business and have strong store sales along with gasoline. In some cases, the c-store can stand on its own,” Whitehead noted. the ability or space to move gasoline as well.” Sheetz, for example, differentiates itself from the Some areas of the country, especially urban and competition with a strong foodservice offering, and has downtown markets, lend themselves to producing cusbecome a destination for prepared food, according to tomer traffic without gasoline, and that is where many Donald Strenk, president of California-based Strenk of these chains are now setting up shop. Management Consulting LLC, who works with gas staQuikTrip’s Atlanta store is within a condominium tion and convenience store operators. In fact, one of the complex, and because of its downtown location, it is positives of not offering gas for Sheetz is its ability to also a high-traffic area with pedestrians walking and focus solely on the quality and freshness of the food. cycling by, Thornbrugh said. “We have some unique food items at these loca“One thing we learned, if you drive around the tions, so we have that ability because we don’t have Atlanta metro area, is most people don’t know our

WWW.CSNEWS.COM | NOVEMBER 2016 | Convenience Store News 71


STORESPOTLIGHT Fuel-Free Conveniece Stores

brand. There is a different type of customer base and demographic that doesn’t go outside of their area, so they may not be familiar with us,” he explained. As a result, this QuikTrip store may be an introduction to the brand for many people. The product mix is different than its other stores — focused even more on fresh food, additional roller grill and more kitchen space. QuikTrip plans on testing new items in this prototype location to see how they are received, in hopes of finding menu candidates to bring to some of its other locations as well. High-quality, prepared food seems to be key in driving traffic without gasoline, according to Strenk. “To be successful without gasoline, a Sheetz Café stores are in college towns and focus predominantly on fresh food. store has to offer high-quality, welldifferentiated prepared food,” he noted. “7-Eleven does well [without selling gas], but cutting contracts to add it, and I can’t imagine these they may not be averaging $300,000 a month. Sheetz companies opening stores without gas saying, ‘I want and QuikTrip have locations that do significantly high to do just a c-store because gas drags me down,’” sales in the c-store.” Strenk told CSNews. For QuikTrip, the fuel-free concept is still relaAlso on the flip side are convenience store chains tively new, but the chain does operate a location like QuickChek Corp., based in Whitehouse Station, in Oklahoma without gasoline that is an in-store, N.J., and operating more than 140 locations. Already sit-down restaurant concept with a drive-thru. This known for fresh food, QuickChek operated for years location previously featured a Wendy’s so there was without gasoline, but is now adding it to stores. already a drive-thru there, and it became a perfect test“Customers need gasoline and they need it each and ing location for the chain. every week, so gas is something that will drive them to “This is still open, and we thought we would try the store,” Whitehead said. “In every scenario, you need the drive-thru and seating for people to come in and to figure out what your strategy is for a particular locarelax to see if this is a possibility for us to grow in the tion and how to profit there. If that includes gasoline, future as well,” Thornbrugh said, explaining so far the then great. If not, then that is fine, too. There are myriad chain is pleased with the results of both locations. “It of products and services that may or may not be included has done very well and has been well received. There in a particular site, and gas is just one of them.” are no plans to expand the concept right now, but we Strenk agreed, and went a step further by stating are very pleased with the results at this point.” that those chains with gasoline already for sale at their sites will not be looking to eliminate the gas sales there because it’s a profit center, just like a car wash or THE OTHER SIDE OF THE COIN offering propane fuel. While some c-store chains are venturing into the terri“I’m led to believe these chains [opening fuel-free tory of stores without gasoline, the fuel business is still a strong profit center and traffic driver. This is true for stores] are identifying [new store] sites where they can’t put gasoline in. But because they have such the c-store industry and other industries like big-box strong brands, they want to leverage the brand equity retailers and grocers. they built,” he said. CSN “The big-box retailers are still adding gasoline and

72 Convenience Store News | NOVEMBER 2016 | WWW.CSNEWS.COM


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OUTABOUT &

Spotlighting major industry events

Growing Past the Growing Pains CDA focuses on assistance, education at its Convenience Distribution Business Exchange By Angela Hanson

C

Convenience

under attack, with reduced Distribution sales affecting the botBusiness Exchange tom line for everybody. September 12-15, 2016 Consolidation was also a Scottsdale, Ariz. major issue for the CDA to contend with. “The association is poised for a very bright and successful future. Retooling was needed. We did that, and now we’re on a roll,” Owen stated. Following through on work that was begun under the previous chairman, Owen described to “In the past, it was appropriate to have the CDBX crowd how he oversaw a series of major staff changes at the association; a five- to 10-year strategic plan. Now, the launch of improved programs and comit’s not even a one-year strategic plan. munications for CDA members; and the It’s looking at everything on a continu- transition to a new Convenience Distribution Marketplace event, which will be held for ous basis, seeing what changed from the second time on Feb. 15-17, 2017 in Orlando, Fla. six months ago, and what’s on the CDA officials spent a year working with forefront of people’s minds.” manufacturers and association members to determine what they really wanted in a trade — Kimberly Bolin, Convenience Distribution Association President & CEO show and how their time spent at the event could be made as valuable as possible. “It was the definition of teamwork,” Owen said of CDA 2016 Chairman Chad Owen, vice president of launching Marketplace. business affairs for convenience distributor Chambers & Owen Inc., echoed Bolin’s optimism during the annual Chairman’s Address portion of the event. CONTINUED ASSISTANCE However, he also reflected on the challenges he’s faced Today, the Convenience Distribution Association is during his time in the chairman role, comparing the the trade organization working on behalf of conveexperience to riding a rollercoaster during a hurricane. nience products distributors in the United States. Its When Owen stepped up as chairman, it was at distributor members represent more than $92 billion a time when the CDA — formerly, the American in U.S convenience product sales, serving a wide variWholesale Marketers Association (AWMA) — was ety of small retail formats. Associate members include being retooled and reinvented as it faced a challengleading convenience product manufacturers, brokers, ing business environment, he recounted. Tobacco, retailers, suppliers and others allied to the industry. a primary profit center of convenience stores, was With much of the “growing pains” now behind onvenience Distribution Association (CDA) President and CEO Kimberly Bolin kicked off the annual Convenience Distribution Business Exchange (CDBX) event with a rosy forecast for the future of the organization. “CDA is on a great trajectory,” Bolin said during her opening remarks, citing the collective expertise of the event’s attendees and advances in technology as reasons for her optimism. The seven-year CDA veteran assumed the chief role permanently in April.

74 Convenience Store News | NOVEMBER 2016 | WWW.CSNEWS.COM


OUTABOUT &

Spotlighting major industry events

it, the CDA will continue to assist its members in a variety of ways, Owen said, particularly through its InfoMetrics program that’s designed to provide the data and information distributors need to make smart decisions and lower costs. While leveraging technology is important for the industry, without data, even the most advanced gadgets are just “shiny hardware that looks cool but means nothing,” he noted. Going forward, CDA expects its members will need to adapt to further changes in the marketplace, such as recognizing the effect millennials are having on the retail space and looking outside the box to identify new profit centers. While this may be a challenge, Owen doesn’t expect it to be an insurmountable one. “Adapting to change is nothing new for us,” he said. THE NEXT STEPS

Some of the changes the CDA has faced are because of a shift in the c-store industry itself, according to Bolin,

76 Convenience Store News | NOVEMBER 2016 | WWW.CSNEWS.COM

who sat down with Convenience Store News at CDBX. “One of the biggest challenges is the consolidation in the market,” she acknowledged. “Both sides, distributors and manufacturers, and our member base is shrinking a bit. We have a smaller membership with a broader array of needs.” To address those varied needs, the association has virtually reinvented itself. This included major technology updates, an increased emphasis on data and analytics, and using them to educate CDA members. Today, the association primarily focuses on government affairs, education and networking, which Bolin says are the three main reasons distributors become CDA members. “If you try and do too many things, you get spread too thin, so it’s focusing on those top three needs and how we can address those and be as strong as we can,” she said. “In the past, it was appropriate to have a fiveto 10-year strategic plan. Now, it’s not even a one-year strategic plan. It’s looking at everything on a continuous basis, seeing what changed from six months ago, and what’s on the forefront of people’s minds.” CSN


HOTPRODUCTS Special Advertising Section

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ATMs

WWW.CSNEWS.COM | NOVEMBER 2016 | Convenience Store News 77


HOTPRODUCTS Special Advertising Section

General Merchandise

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


CLASSIFIED Credit Card Processing / Merchant Services

WWW.CSNEWS.COM | NOVEMBER 2016 | Convenience Store News 79


CLASSIFIED POS/Equipment/Supplies

80 Convenience Store News | NOVEMBER 2016 | WWW.CSNEWS.COM


CLASSIFIED Loss Prevention

Plastics

Help Wanted

WWW.CSNEWS.COM | NOVEMBER 2016 | Convenience Store News 81


CLASSIFIED Air Vacs

ATMs

82 Convenience Store News | NOVEMBER 2016 | WWW.CSNEWS.COM


CLASSIFIED Petroleum/Equiment

Plastics

Air Vacs

WWW.CSNEWS.COM | NOVEMBER 2016 | Convenience Store News 83


CLASSIFIED Pre-Paid/Cellular Products

84 Convenience Store News | NOVEMBER 2016 | WWW.CSNEWS.COM


CLASSIFIED Age Verifier

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CLASSIFIED Services

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86 Convenience Store News | NOVEMBER 2016 | WWW.CSNEWS.COM


CLASSIFIED Financial Services

Wholesale Text Program

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Equipment / Supplies

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Terry Kanganis at Stagnito Media at 201-855-7615 for more details. WWW.CSNEWS.COM | NOVEMBER 2016 | Convenience Store News 87


ADINDEX Add Systems ....................................................................... 16 Advance Pierre ................................................................... 59 Altria Group Distribution Company ................................. 2-3

570 Lake Cook Road, Suite 310, Deerfield IL 60015 Phone (224) 632-8200 Fax (224) 632-8266 www.stagnitobusinessinformation.com

Anheuser-Busch................................................................. 92 Assembled Products/Spray Master.................................. 51 Axis Communications ........................................................ 51 Campbells ........................................................................... 33

Peter Hoyt President & CEO 773-992-4456 phoyt@p2pi.org

Cash Depot.......................................................................... 21 Chef’s Cut............................................................................ 73 Chobani ............................................................................... 65 Coca Cola ............................................................................ 23 EJ Gallo/Barefood Cellars ................................................. 53 Forte Products..................................................................... 64 fri-jado................................................................................. 43 Growth Energy................................................................... 13 Hatco Corporation .............................................................. 35 Hershey’s ............................................................................ 7 Hussmann Corporation...................................................... 29 Iowa Rotocast ..................................................................... 41 Kretek .................................................................................. 19a,91

Ned Bardic Chief Customer Officer 224-632-8244 nbardic@ensembleiq.com Korry Stagnito Chief Operating Officer 224-632-8171 kstagnito@ensembleiq.com Ron Lowy Group Brand Director 330-840-9557 rlowy@ensembleiq.com Michael Hatherill Business Development Manager 201-855-7610 mhatherill@ensembleiq.com

KT&G.................................................................................... 47,49 Logic Technologies ............................................................ 10-11 McKee/Little Debbie .......................................................... 25 McLane Company............................................................... 5 Mondelez International..................................................... 63 NAFEM................................................................................. 39 National Restaurant Association...................................... 15 Perfetti Van Melle............................................................... 67 Pinnacle Corporation......................................................... 17 RJ Reynolds Tobacco Company ....................................... 9

Terry Kanganis Account Executive & Classified Advertising 201-855-7615 tkanganis@ensembleiq.com Erika Cann Southeast Regional Sales Manager 330-357-9207 ecann@ensembleiq.com Rachel McGaffigan Northeast Regional Sales Manager 508-385-2524 rmcgaffigan@ensembleiq.com

S&M Brands ........................................................................ 37 Subway................................................................................ 45 Swedish Match/Longhorn ................................................ 31

Dian Melius Western Regional Sales Manager 949-387-1451 dmelius@ensembleiq.com

Swisher International Inc. ................................................ 61 ThorWorksIndustries/The Carollina Nut Company........ 57 Tillamook Country Smoker, Inc........................................ 69 TPE 2017 ............................................................................. 19a

Roz Gilman Ad Manager 314-403-4753 rgilman@ensembleiq.com

Tyson ................................................................................... 54-55 Universal Merchant Services............................................ Outsert

EnsembleIQ U.S. brands:

Convenience Store News (ISSN 0194-8733; USPS 515-950) is published 12 times per year, monthly, by EnsembleIQ, 570 Lake Cook Rd. Deerfield, IL 60015. Copyright © 2016 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.

WWW.CSNEWS.COM | NOVEMBER 2016 | Convenience Store News 88


Same C-store Channel. Different C-store Businesses.

DIRECTORY OF CONVENIENCE STORES Chains often take a more global view of things and look for products, services, and resources that impact their total enterprise.

DATABASE OF SINGLE STORE CONVENIENCE OWNERS Single store owners, along with their distribution partners, often don’t have the level of business support that chains bring to their stores. They’re always on the lookout for new products and solutions to compete in an increasingly complex market.

In C-store retailing, there is no “one size fits all” solution. Chains and single-store operators occupy the same channel, but they have very different challenges.

Reach All the Right Retailers in All the Right Ways Visit www.Retailbuyers.net, call 813-713-4301 or contact klopez@ensembleIQ.com for more information or product demonstrations. POWERED BY


GETTINGTOTHECORE In the past year, where have you purchased motor fuels?

Facts on Fuel Purchasing Consumers weigh in on why they purchase their motor fuels where they do

A

cross the United States, there are 124,374 convenience stores that sell motor fuels, so itâ&#x20AC;&#x2122;s not surprising that nearly threequarters of consumers who have purchased fuel in the past year say they have done so at a convenience store. Carbonview Research, sister company of Convenience Store News, recently surveyed 511 U.S. consumers who own a car about their fuel purchasing habits. The findings highlight some interesting facts about the fuel path to purchase.

84.5%

Gas Station

72.2%

Convenience Store w/Gas Station

37.0%

Supermarket

31.5%

Warehouse Club

24.7%

Highway Truck Stop

1.6%

Other

Base: 511 respondents who own a car and have purchased motor fuels in past month

Has your purchasing of motor fuels changed during the past year? PURCHASE AT: GAS CONVENIENCE STORE STATION W/ GAS STATION SUPERMARKET

TOTAL

I purchase more gallons per visit I purchase fewer gallons per visit I make more stops to purchase motor fuels I make fewer stops to purchase motor fuels I have not changed my fuel purchasing

76.0% 24.0% 21.1% 16.1% 62.8%

76.5% 23.5% 22.0% 15.2% 62.8%

77.1% 22.9% 23.3% 15.8% 60.9%

70.4% 29.6% 25.0% 15.7% 59.3%

WAREHOUSE CLUB

79.6% 20.4% 27.8% 14.8% 57.4%

While fuel consumers overall are buying more gallons per visit, this trend is most prevalent among warehouse club buyers.

*Multiple responses accepted Base: 511 respondents who own a car and have purchased motor fuels in the past month

How important are each of these factors in your decision to purchase motor fuels? Cheapest price Convenient location Has a brand I prefer Offers exact product/formulation I want (diesel, alternative fuel, etc.)

Offers environmentally friendly fuel alternatives

TOTAL

AGE: 18-24

25-34

35-44

45-54

55-64

65+

1.8 2.0 3.2

2.0 2.1 3.5

1.8 2.0 3.2

1.9 2.1 3.2

1.7 1.9 3.2

1.9 1.8 3.3

1.8 2.1 3.0

3.9 4.1

3.7 3.8

3.8 4.2

3.9 4.0

4.0 4.2

3.9 4.2

4.1 4.0

Price is the most important factor for most fuel consumers. The exception is those aged 55-64 who value a convenient location more.

Ratings: 1=most important, 5=least important Base: 511 respondents who own a car and have purchased motor fuels in the past month

How far out of your way would you drive for a lower fuel price? 1-2 miles 3-4 miles 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.

90 Convenience Store News | NOVEMBER 2016 | WWW.CSNEWS.COM

5-9 miles 10+ miles

28.6% 38% 19% 5.3%

Just shy of 10 percent of respondents would not drive out of their way. Those aged 18-24, however, are the most pricedriven as this figure drops to 3.2 percent among them.

Base: 511 respondents who own a car and have purchased motor fuels in past month


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10:15am–11:30am ROUNDTABLE SESSIONS “Still Smoking OTP: Premium Cigars, RYO, & Smokeless Continue to Grow” –Kelly Michaels (STG/Lane), Frank Armstrong (Pres Blue Ridge Tobacco), Sergio Montolfo (General Manager, Phillips & King)

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22nd Century Group Inc. /Red Sun Cigarettes A & T Tobacco Marketers AFG Distribution, Inc. Afinia Label Airco DIET a.s Alpaca Bowl Company Altadis USA AlZawrae Industrial Company American Weigh Wholesale, Inc/ #1 Wholesale AmeriNic, Inc. Amigo Vape USA Arrow Lighter, Inc. Art Hookah LLC Aspire Vape Co Avanti Cigar AviorData Bahama Mamas Cigars Bank Card USA Basik Trading, Inc. Best Choice Distribution Best Rate Merchant Service BIG Publications Big River Trading Company Black Dragon Enterprises LLC Blackcat Blue Ox Vapor BMJ Industries Boveda Brassworld C Breeze Group. Inc. C.L.E. Cigar Company C9 Hookah, LLC CAGS Tobacco Capmatic Captain Amsterdam Card Connect Casio America, Inc. CBD Drip Charco Flare Charlie’s Chalk Dust Cherokee Tobacco Co Cheyenne International, LLC Chrome Cellular CigGo Cloud 9 Distributors LLC Coast to Coast Connection Ltd. Cofo Industrial Group Limited Colibri Group Color Flame Kings ConsumerNext Convenience Store Decisions Daughters & Ryan, Inc. Davidoff of Geneva Distribution, Inc. DBA Gran Habano Cigars DFW Vapor Dosal Tobacco Corp Drew Estate DSK Distribution DUELL TICARET E-Alternative Solutions East Carolina RYO East West Trading Corp. Easy Stock Solutions ECR Software Corporation ENOR Int’l Inc. ERB Magazine Eve Energy Co., Ltd Evolution Cigarettes Inc. o/a Moshi Farmers Tobacco Co. of Cynthiana, Inc. FasTrax POS LLC Feellife Bioscience International Co., Ltd. Filamatic First Choice Pipe Tobacco Five Pawns Inc Flowermate Technology, LLC FocusEcig Technology Co., Ltd Foglite Technologies, Inc. Formula 420 Fullymax Battery Co., Ltd

Futurola USA LLC Fuzion Global Corp. G & H Company Gallery Vape Geekvape Co., Ltd General Cigar Co. Global Laboratory Services, Inc. Global Tobacco LLC Glow Industries, Inc. Good Times USA Gourmet Innovations Green Buddha LLC Green Garden Gold Green Planet Inc. Grind Distribution LLC Harold Levinson Associates Haze Tobacco HBI International HDC Dist - Headdies / White Rabbit Heritage Tobacco LLC High Voltage Detox Hilo Vapor Hong Kong BAOFA Industry Trade Co., Limited Hookah Bar Group Hookah John/Titanium Coconut Coals Hookahzz, LLC Hookaps America, Inc. Hubei Yunsheng Science Technology Industrial Park Co., Ltd Huizhou Kimree Technology Co., Ltd Ignitus Corporation Innokin Technology Co., Ltd Inter-Continental Cigar Corp. Inter-Continental Trading USA, Inc. International Vapor Group Intrepid Brands (National Tobacco) J.C. Newman Cigar Company Jacob’s Paradise Inc. Jasper Technology JAY Manufacturing Co. JJuice LLC JM Tobacco JT International USA, Inc. K. K. Int’l Corp KEENPACK INDUSTRIAL LIMITED Khalil Ma’amoon King Maker Marketing, Inc. Kingfish Electronics Co., Ltd Kings Cigars Kretek International L.A. Lighter, Inc. La Gran Llave Limited La Pantera International La Vaporz Wholesale Lookah Hookah Products LLC Lucas Lighters LLC Lucky Sales, Inc. M & R Holdings, Inc. McChrystals (Leicester) Limited Medwakh.com, Inc. Megawholesale Inc. MISHA MOB Hookah LLC Myvapors Nat Sherman, Inc. Native Trading NATO NEW AMSTERDAM GLASS New Image Global/Royal Blunts Newport Butane NHA, Inc./National Honey Almond Nicopure Labs, LLC Nordpak Packaging LLC Nova Distributors, LLC - Tarbar Nuaxon Bioscience Inc OG Bowls Ohserase Manufacturing, LLC Oliva Cigar Co Party Nuts Phillips & King International, Inc. PiMP

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Point Art USA, LLC Potions Unlimited LLC Premier Manufacturing, Inc. Premium Cigars by Don Rigo, Inc. Premium Estore, LLC Price Master Corp. Prime Time International Distributing Inc. QuadPackaging (Formely Copac) Quicklabel System Republic Tobacco Rocky Patel Premium Cigar Company Rouseco, Inc. RPl International RSB Tobacco, Inc. RT Glass Imports Sagaer Group B.V. Sahara Smoke Company Sahara Wireless International, Inc. Sandia Tobacco Manufacturers, Inc. Santa Clara, Inc. Santa Cruz Tobacco, LLC Scandinavian Tobacco Group, Lane Sejuiced Inc. Shisha Tech Shishabucks Skeye Wholesale Smoker Friendly International Smokey Mountain Chew, Inc. Space Jam Juice Spectrum Labs Spectrum Vapor/St. Augustine Organic Square Starbuzz Tobacco, Inc. Steam Crave Streetwise Security Products Sunkey USA LLC/Sunkey Packaging Co., Ltd Sunshine Tobacco Super Glory Distribution Sweet Southern Vapes Swift-Lite Trading SX Brands Tantus Tobacco LLC Test Company - OBR The Mamasan TMS International Corp. Tobacco Outlet Express Tobacco Outlet Products Transpring USA Trendsettah USA, Inc. Tronic Vape Tsunami Electronic Cigarettes Turning Point Brands Turning Point Systems, Inc. Ultimate Hookah Corp. United Brands USA Sales Inc. Vapor State, LLC Vaporous Technologies Vaportech USA VAPRO Supply Vaptio, Inc. Vasu Imports Inc Villiger Cigars North America Vision Cigar VONERL GmbH Weighmax Group William R Seide Agency LLC Wind River Tobacco Company Xcaliber International XJ Group USA Zahrah USA Zhejiang Byer Plastic Co., Ltd Zhejiang Ou Nuo Si Industry & Trade Co., Ltd Zhuhai Youde Technology Co. Ltd Zico USA Inc. Zoidian Cigar

*past and present


Convenience Foodservice on the March

CSNews’ Convenience Foodservice Exchange brings together best-in-class retailers and suppliers who strive for foodservice excellence

I

think you’ll agree that foodservice, without question, can significantly increase convenience store profits. But it is also more complex than any other in-store category and requires more research, planning, discipline and commitment. It also requires innovative thinking and a better understanding of why and when consumers choose to purchase prepared food at a convenience store.

We hope this recap of the 2016 Convenience Foodservice Exchange provides you with some important learnings that can help propel your business to new heights in the coming year. These are the themes we explored over two days this fall at the first Convenience Foodservice Exchange, an exclusive, new event created by Convenience Store News. Through consumer research, expert commentary from operators, case studies, face-to-face meetings with suppliers and distributors, and examples of industry innovation, approximately 50 c-store retailer foodservice executives shared success stories and the challenges they face. At the end of the two days, retailers and suppliers came away with actionable information and insights that

4 Guide to Foodservice | WWW.CSNEWS.COM

they believe will lead to increased sales and improved shopper engagement. This special Guide to Foodservice presents highlights of this groundbreaking conference. Our speakers addressed such key subject matters as product and technological innovation; capFor comments, please contact turing a larger share of dinDon Longo, Editorial Director, nertime dollars; the future of at (201) 855-7606 or foodservice distribution; and dlongo@ensembleiq.com. how to capitalize on consumers’ demand for healthier foods. Our “Ask the Experts” panel addressed critical how-to challenges around the hot and cold beverages business, new foodservice equipment, marketing to women and millennials, targeting the snack daypart, the efficacy of drive-thrus, and much more. Our exploration of foodservice trends took us into the supermarket industry for a close-up look at one of the best examples of a “grocerant.” The award-winning Market Bistro concept by Price Chopper exemplifies the nexus between quick casual dining and a full supermarket shopping experience. And we recognized two best-in-class leaders in the advancement of foodservice in the convenience store industry with the presentation of the first CSNews Foodservice Executive of the Year awards to Kelly Buckley of 7-Eleven Inc. and Rich Green of Maverik Inc. We hope this recap of the 2016 Convenience Foodservice Exchange provides you with some important learnings that can help propel your business to new heights in the coming year. CSN


Contents

4 | Convenience Foodservice

on the March

CSNewsâ&#x20AC;&#x2122; Convenience Foodservice Exchange brings together best-in-class retailers and suppliers who strive for foodservice excellence.

20 | The Grocerant Trend

Price Chopperâ&#x20AC;&#x2122;s Market Bistro store is an example of how memorable guest experiences turn casual customers into brand ambassadors.

24 | Embracing the 6 | Understanding Convenience Opportunity in Health

Foodservice Innovation

Consumers and retailers rate potential c-store offerings in exclusive research study.

8 | Behind the Research

How we explored new and innovative foodservice offerings at c-stores.

12 | The Top Chef & the Guru Rick Bayless and Phil Lempert add spice to the Convenience Foodservice Exchange.

16 | Getting to the Next Level Industry experts exchange insights during Convenience Foodservice Exchange panel.

& Wellness

C-stores face extra challenges in offering fresh products, but these can be overcome.

28 | Figuring Out the

Foodservice at Retail Supply Chain

C-stores have myriad choices for foodservice sourcing.

30 | Can Sous Vide Boost

C-store Sales?

The cooking method could enable a better foodservice offer with fewer resources.

18 | Dinnertime Dollar

Understanding family dynamics can help boost sales of evening meals.

WWW.CSNEWS.COM | Guide to Foodservice 5


Understanding Convenience Foodservice Innovation

Consumers and retailers rate potential c-store offerings in exclusive research study By Don Longo

W

hat are the most exciting and obtainable foodservice options for today’s convenience stores? A new, exclusive research study, powered by Convenience Store News sister company Carbonview Research, tapped both c-store retailers and consumers to answer this question. The study explores topics related to driving traffic, satisfaction, greater share of visits and increased profitability, and uncovers such innovations as flavored water stations, burrito bars, loyalty programs, salad bars, a craft beer and soda department, and yogurt bars. The inaugural CSNews Convenience Foodservice Exchange kicked off with a dynamic presentation that compared consumers’ view of foodservice innovation ideas with those of actual retailers. The new conferSix Factors Retailers ence, hosted Sept. 15-16 in Weigh When Schaumburg, Ill., is the only Considering New Ideas conference and exhibition •Lower margins focused entirely on conve•Customization nience store foodservice. The •Technological enhancements event drew approximately 50 •Commitment required retailers, representing more •Variety than 22,000 stores. •Cost implications In the keynote presentaSource: Carbonview Research 2016 Consumer/Retailer tion entitled “Exploring Study for Convenience Foodservice Exchange New, Innovative Foodservice Offerings at C-Stores,” Randi Etzkin, director of research and strategy for Carbonview Research, another division of CSNews’ parent company EnsembleIQ, and David Mills, president of Mills Consulting Group, advised retailers to try and understand why consumers prefer what they do. The duo compared the product, technology and service offerings most preferred by consumers with

6 Guide to Foodservice | WWW.CSNEWS.COM


“To be an innovator, you need to disrupt a category. You must change the competitive landscape.” — Randi Etzkin, Carbonview Research

retailers’ assessment of the viability of those offerings. They found that while consumers preferred such potential offerings as a 24-hour, secure product dispensing unit outside the store, drive-thru windows and loyalty programs, retailers tended to balk at ideas they felt were too difficult or costly to execute. Etzkin pointed out that six in 10 consumers surveyed said they haven’t seen anything new at a convenience store in the past year. At the same time, eight in 10 consumers said they would visit c-stores more often if they featured new and innovative offerings. “To be an innovator, you need to disrupt a category,” said Etzkin. “You must change the competitive landscape.” Weighing more than a dozen ideas from each side (retailers and consumers), the research appeared to highlight three ideas that resonated with both groups. A H2O Flavored Water Station was preferred by consumers because it allowed new customization, while retailers viewed the innovation as a “quick win” that is easy to execute and would have high impact on the store. Retailers agreed that two other ideas — a Create Your Own Burrito Bar and Loyalty Programs — are also highly impactful and worth the effort, even if they would be harder to execute. Other ideas that garnered high mutual interest from both consumers and retailers were salad bars, yogurt bars, a craft beer and craft soda department, and a quick-chill beverage cooler. Consumers gave high marks to several other ideas that didn’t resonate as highly with retailers. For example, a create-your-own doughnut bar and traveling c-store food trucks didn’t quite strike a chord with retailers. “Develop ideas of what drives customer satisfaction, then use a disciplined, fact-based approach to minimize the risk of missteps and enhance the probability of success,” advised Mills. CSN

WWW.CSNEWS.COM | Guide to Foodservice 7


Behind the Research

How we explored new and innovative foodservice offerings at c-stores By Randi Etzkin, Carbonview Research

I

t has been said many times this year: Now may be the best time to be a convenience store retailer. By almost every measure, 2015 was one of the best years in convenience store history. Gas prices were down — in fact, fuel sales as a percent of total sales was down 7 percent, according to the latest Convenience Store News Industry Report. That means only one thing: all growth in the channel is coming from inside the store. Of all the in-store categories, foodservice, and prepared foods in particular, is the most important category for future growth. Foodservice sales grew by 7 percent last year, outpacing the overall 5-percent increase in in-store sales. More importantly, foodservice is the c-store’s most profitable category, generating $96,662 in gross margin dollars per store last year, a 5-percent increase. Given the importance of the foodservice category, Carbonview Research decided to investigate what are the most innovative products consumers want, and which of these products retailers can implement to drive traffic and sales to their stores. Based on ideation sessions conducted with culinary

8 Guide to Foodservice | WWW.CSNEWS.COM

students in Chicago in 2015, we tested and evaluated 18 new and innovative foodservice concepts. We surveyed both consumers and retailers during the summer of 2016 to get a comprehensive look at appeal, uniqueness, relevance, likelihood to purchase (consumers), likelihood to implement (retailers), and impact vs. effort (retailers). The concepts were split into two distinct groups: food and beverage product concepts and technology/services enhancement concepts. The following is a list of each group’s concepts: Food & Beverage Product Concepts • Create-Your-Own Doughnut Bar • Create-Your-Own Salad Bar • Create-Your-Own Pasta Bar • Create-Your-Own Ramen Bar • Create-Your-Own Burrito Bar • Create-Your-Own Yogurt Bar • Craft Section • H20 Flavor Station • Food Trucks Technology & Services Enhancement Concepts • 24-Hour Access • Drive-Thru Window Service


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• Going Green Initiative • Loyalty Program • Coffee Warmer • Beverage Cooler • Faster Checkout by Sensor • Curbside Service • Passenger-Side Packaging Prior to concept evaluation, we asked consumers what they wanted to see at convenience stores and what they valued most at the stores they shop. Consumers said variety, cleanliness, price value, convenience, and quality/freshness are most important to them. Sixty percent of consumers said they didn’t think there was anything new of interest at the c-stores they shop, but 79 percent of them said they would consider visiting c-stores more often and buy food, beverages and snacks if they offered new products and services that were of interest to them. Similarly, we asked retailers for feedback on what they most wanted in the prepared foods category, what is currently missing, and what can be improved upon. Retailers said they desire foodservice innovation, but agreed they need to take a lot of potential issues into consideration when deciding what new products to introduce. Such factors as customization, variety, lower margins, cost implications, technological enhancements and the commitment it takes to implement a product all impact their thinking. This understanding of what is important to both consumers and retailers can help us when examining the concept evaluation results. We then introduced our 18 concepts to consumers and retailers. When evaluating our concepts overall, we found that among consumers, the concepts that resonated the most with them were the ones that showed a higher likelihood to purchase or higher likelihood to visit more often. We found many similarities in the ones that consumers rated high and retailers rated high. RISING TO THE TOP

To summarize the best of the best concepts, we chose three out of the 18 as our top picks: H20 Flavor Station We called this one “The Quick Win” for the following reasons: • Was seen as unique and relevant among consumers. • Moderate to high likelihood to purchase compared to other food and beverage concepts. • 60 percent say they would visit a c-store more often if H20 Flavor Station was offered. • Rated the most favorable among retailers.

10 Guide to Foodservice | WWW.CSNEWS.COM

• One of three food and beverage concepts that is of high mutual interest to both retailers and consumers. • Retailers rated this the only concept as high impact on increasing business and low effort to implement/execute. Create-Your-Own Burrito Bar We called this one “The Big One” for the following reasons: • Most popular among consumers for being customizable, prepared in front of them, and fresh. • 68 percent say they would visit a c-store more often if burrito bar was offered. • Rated most favorable among consumers. • Rated second favorite among retailers. • One of three food and beverage concepts that is of high mutual interest between retailers and consumers. • Retailers rated this as a high impact on increasing business; however, they also rated it as high effort to implement/execute. Loyalty Program We called this one “The High Hanging Fruit” — it takes more effort and requires more time, but usually is the most rewarding — for the following reasons: • Most popular among consumers for being relevant, rewarding/appreciated, and having discounts/savings/giveaways. • 71 percent say they would visit a c-store more often if a loyalty program was offered (the highest of all the tech/services concepts). • Rated most favorable among consumers. • Rated most favorable among retailers. • Was of high mutual interest between retailers and consumers. • Retailers rated this as a high impact on increasing business; however, they also rated it as high effort to implement/execute. CSN For a complete breakdown of the data by concept, please contact Laura Nicklin at Carbonview Research. She can be reached at (224) 404-2154.


The Top Chef & the Guru Rick Bayless and Phil Lempert add spice to the Convenience Foodservice Exchange By Don Longo

“S

omething in every dish has to seduce me. It could be a flavor that makes me go, ‘Wow,’ or something in the dish that evokes a positive memory.” Rick Bayless, the award-winning chef, television personality, cookbook author and restauranteur, has very strong convictions about the latest food trends in the United States, the impact of millennials, the importance of authenticity and freshness, and employee training programs. The former Bravo TV Top Chef Master shared these convictions in an hour-long conversation with Supermarket Guru Phil Lempert at the 2016 Convenience Foodservice Exchange. Lempert, himself a popular TV personality and one of America’s leading consumer trend watchers and analysts, interviewed Bayless and got the top chef to speak about his passion for people and the authentic food of Mexico. Bayless’ highly-rated Public Television series, “Mexico — One Plate at a Time,” can be found on televisions coast to coast, and his six cookbooks have won several awards. Bayless said his notion of authenticity is something Bayless is an award-winning chef, TV personality, cookbook author, and restauranteur.

Lempert moderated the one-hour interactive discussion with Bayless.

with “true” flavor. “You don’t go down to Mexico and return with grandma’s recipes and think that what you make is authentic,” he said. Authenticity is especially important to millennials, like his daughter. “They care that something rings true as a flavor,” he explained. “They don’t want something watered-down or made bland in order to appeal to the masses.” Above all else, food should evoke emotion. “I want an emotional reaction from our guests. I love anything to do with feeding people. We get to make people happy. That’s the big payoff.” BEING BOLD

Bayless’ side-by-side, award-winning restaurants in Chicago — the casual Frontera Grill and the fourstar Topolobampo — were founded in 1987. In 2007, Frontera Grill won the James Beard Award for Outstanding Restaurant. “I think the changing population of America has changed what they are looking for from food. People want more spice and bolder flavors,” Bayless remarked. The chef also extolled the open kitchen concept,

12 Guide to Foodservice | WWW.CSNEWS.COM


Bayless urged the c-store foodservice execs in the audience to focus on freshness.

with a twist. “It’s just as important for our cooks to see the faces of our guests as it is for the guests to see the food being prepared.” Bayless pointed out that his award-winning, quickservice restaurant at O’Hare International Airport proves that people don’t want bland food. Bayless battled HMS Host, which owned the foodservice concession at the airport, over everything from the supply chain to menu selection. “They wanted us to do a watered-down version of Frontera. We said we would only do this if we can make ‘our’ food using ‘our’ ingredients,” he recounted.

Tortas Frontera became the single most-talked-about restaurant at the airport and has won international awards for its food. “So many people in the U.S., especially younger people, love spicy foods,” said Bayless. He also advised convenience foodservice executives to get freshness into everything they do, and don’t forget the notion of transparency. “Freshness is more than lettuce on a sandwich or an apple at the register,” Bayless went on. He advocated for businesses to spend more money on education and training programs, too. “We have the opportunity to change the world through our employee training programs. Rather than trying to make things ‘idiot-proof,’ how about we invest in training so an entry-level foodservice position isn’t a dead-end job anymore.” One of Lempert’s final questions was: “If there was one thing you could change in the food industry, what would it be?” “I’d like to see really great culinary school and foodservice management programs that were free and accessible to everyone,” responded Bayless. CSN

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Getting to the Next Level Industry experts exchange insights during Convenience Foodservice Exchange panel By Angela Hanson

M

ost convenience store operators are capable of running a basic foodservice program, but taking it to the next level in terms of consumer satisfaction and profits is best achieved by learning from those with a deep knowledge of c-store foodservice. Members of the Convenience Store News How To Crew of foodservice experts weighed in on a variety of category-related topics during the “Ask The Experts” panel at the Convenience Foodservice Exchange, moderated by CSNews Editorial Director Don Longo. The panelists included: • Larry Miller, Miller Management & Consulting Services • Tim Powell, Q1 Consulting • Joe Chiovera, XS Foodservice & Marketing • Justin Miklos, Director of Foodservice, Coen Oil Co. • Tom Cook, Principal, King-Casey The panel agreed that coffee is king of the beverage side of foodservice, partially due to its high margins and easy preparation. It is also popular across many demographic groups, making a coffee program a sound investment for c-stores. Chiovera noted that along with its ability to trigger other purchases, as the vast majority of customers add both sweet and savory items to go with their java, c-store coffee has one advantage over competitors. “What we still own is customization — we lost convenience a long time ago” compared to coffee retailers that offer drive-thrus, Chiovera said. However, c-store customers can make their own cup exactly as they want it. “The best cup of coffee made for Joe is by Joe.” Advances in retail foodservice equipment have also made for operational improvements, but they must be used correctly, the experts said. For example, a rapid-cook oven that is used to make items that will remain in a warmer for two hours is not being utilized efficiently.

16 Guide to Foodservice | WWW.CSNEWS.COM

Members of Convenience Store News’ How To Crew panel of foodservice experts weighed in on the issues of most importance to c-store foodservice operators.

Whether used for coffee or not, drive-thrus may be the ultimate convenience, but the specific layouts and locations of c-stores mean that they don’t fit all operations. For retailers that are considering adding a drive-thru, Chiovera said, “If you’re purchasing real estate for foodservice, without question, I think it’s the smartest move you could possibly make.” However, if an existing store is being retrofitted and there is some doubt about whether the site’s features would enable a drive-thru to drive sales, it might not be appropriate. Powell noted that some cannibalization of impulse items may occur at c-stores that add a drive-thru, but the opportunity to substantially increase overall sales due to the convenience factor makes the sacrifice worth it. “This is a real opportunity area for the category.” According to the panelists, other issues c-store foodservice operators should be aware of include: afternoon snacking as a long-term trend; continued equipment advances as manufacturers follow retail foodservice innovation; and a shift in how the current generations view c-store food. Millennials are already more accepting of c-store food quality, and certain products such as fresh salads can be worth using as loss leaders to show women in particular that a c-store is offering more of the types of foods they want. CSN


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Dinnertime Dollar

Understanding family dynamics can help boost sales of evening meals By Angela Hanson

W

hat will make someone choose your store or restaurant over all the rest? During the Convenience Foodservice Exchange, Eric Le Blanc, director of marketing for Tyson Convenience, and Christopher Brace, founder and CEO of Syntegrate Consulting, presented just-completed qualitative research exploring how retailers can reposition their deli prepared foods sections to be more competitive with other takeout options. â&#x20AC;&#x153;We no longer live in a need-based society. We live in a want-based society,â&#x20AC;? Brace said. Accordingly, he

advised that c-store retailers should try to determine what will make someone select their store out of the multiple locations they regularly drive past.


Benefits of Family Meals The findings of their research showed that the emotional experiences of family dinners are governed by existing family dynamics and parenting styles; not the food that’s consumed. So, instead of talking about meal deals or qualities such as freshness when promoting foodservice products to be taken home to the dinner table, the pair said grocery store delis and convenience stores alike could forge a connection with consumers by framing the dialogue in the context of the emotional benefits families will experience via the meal. Four possible communication paths for retailers to use are: • Overall family togetherness • The parents’ perspective • The kids’ perspective • Parents’ childhood memories For parents, family meals allow them to check in on their kids, show they care, and express/share their values and beliefs. For kids, family meals provide a safe

space where they learn to assert their personality, plus repetitiveness builds trust and confidence. In addition to reaching families, convenience stores also have the opportunity, even more so than grocery store delis, to assess how to bring a similar level of emotional connection to non-family households — and capture even more dinnertime dollars. CSN

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WWW.CSNEWS.COM | Guide to Foodservice 19


The Grocerant Trend

Price Chopper’s Market Bistro store is an example of how memorable guest experiences turn casual customers into brand ambassadors By Angela Hanson

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onvenience store foodservice programs don’t only compete with each other. Grocery stores and restaurants are after the same consumer dollars. What’s more, in recent years, Schenectady, N.Y.-based Price Chopper Supermarkets proved that a hybrid competitor — dubbed the “grocerant” — can do just as well. In fact, the grocerant is now defining the future of the grocery channel. “Everyone has the opportunity to create memorable guest experiences, but you really have to design

it,” said Convenience Foodservice Exchange presenter Lewis Shaye, vice president of culinary concepts for Price Chopper. “It doesn’t just happen.” The more than 80-year-old company, which has 135 stores in six Northeast states, seized the opportunity to turn casual customers into brand ambassadors through its new Market Bistro and Market 32 grocerant concepts. Located in Latham, N.Y., the 90,000-square-foot Market Bistro is both a prototype and a researchand-development store. “It’s a real destination store,” Shaye said, adding that it exists where shopping and

The entryway to Bistro Boulevard welcomes customers to an “eater’s paradise.” The feel is of a city market where individual shops have their own personalities, but operate in a common space.

The Veggies and Greens concept is a step up from traditional supermarket self-serve salad bars. All salads here are tossed to order, with more than 30 ingredients available.

Fresh-made, 15-inch sub sandwiches use rolls from Market Bistro’s own bakery, deli meat that is sliced daily at the store, and lettuce that is shredded on-site instead of bagged.

The Plump Hen and Smokehouse features hickory-smoked meats and hand-breaded fried chicken made on-site, highlighted by an optimized lighting scheme focused on the food.

20 Guide to Foodservice | WWW.CSNEWS.COM


Market Bistro’s Fish Fry, Fresh Sushi and Seafood departments are positioned near each other because they complement one another.

The Chef’s Grill offers full service via an open kitchen for all three meals of the day.

The “water wall” in the seafood department, a simulat- The Italian Market is the store’s own version of ed movement generated by lighting that moves across Little Italy, offering a wide array of Italian favorites the wavelike background, makes shopping more fun. including meats and cheeses sliced to order, olives and olive oils.

from mom-and-pop shops, farmers markets, and “bestin-class” regional chains. The end result: more than 2,000 recipes served up by Market Bistro’s 15 food concepts. A great deal of thought was likewise given to Market Bistro’s seating and lighting in order to mimic a true restaurant experience. The various foodservice concepts within it offer mainstream menus with

“Everyone has the opportunity to create memorable guest experiences, but you really have to design it. It doesn’t just happen.” — Lewis Shaye, Price Chopper Supermarkets

Both pan pizza and New York-style thin crust pizza are The Artisan Breads and Pastry Shop is part of Market available at the Stone Fired Pizza concept, alongside Bistro’s commitment to making authentic breads, custom pizzas, specialty designer pies, plus the Mac doughnuts, cakes, pies and more from scratch. and Cheese Bar.

dining intersect. To create Market Bistro, Price Chopper remodeled an existing location and added a cooking school as a bonus amenity. Through the planning process, the chain came up with more than 15 contemporary food concepts in both quickcasual and full-service formats, combined with a unique grocery store. And the concept of service

22 Guide to Foodservice | WWW.CSNEWS.COM

was deemed just as important. “We use service as a differentiator,” Shaye said, to transform customers into brand ambassadors by offering a memorable experience with a culture of above-andbeyond hospitality. The planning process included brainstorming and traveling across the United States, and beyond its borders, getting inspiration

a mix of worldly adventure. Local is also a focus, with the supermarket’s fresh ingredients used throughout the day in handmade food. Those ingredients are sourced from local partners whenever possible. Market Bistro’s “recipe for success” consists of three main parts: menu design and culinary work; kitchen and equipment design; and store design integration. Most importantly, Price Chopper assembled a project team with wide expertise in kitchen design, equipment selection, restaurant environmental design, store design and operations. In particular, knowledge of operations was critical to ensure the concept functioned well. CSN


Don’t blend in with the same bland convenience store offerings

Stand out with hot prepared foods

Embracing the Opportunity in Health & Wellness C-stores face extra challenges in offering fresh products, but these can be overcome By Angela Hanson

You were meant to stand out. In today’s hyper-competitive world, you need an edge over your competition. Fried food is an excellent solution for setting yourself apart from the microwave-crowd. With high profit margins, fried foods will not only increase your bottom line, but also make you a one stop destination for consumer convenience.

AutoFry makes your leap into foodservice easy. From the moment you plug AutoFry in, you’ll be making delicious fried food without the hassle of expensive hoods or vents, extensive training, or hiring a fry clerk. Anyone can operate AutoFry in just three simple steps and maintenance is minimal. Let AutoFry be the

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onvenience stores are not traditionally known for healthy options, but what today’s consumers want from their prepared-food purchases is changing. By honing a focus on health and wellness, c-store retailers can better meet these evolving demands. That was the message conveyed to Convenience Foodservice Exchange attendees by Jennifer Campuzano of the Nielsen Perishables Group and Maglio Cos. President Sam Maglio, who co-presented a session entitled “The Fresh Imperative: Capitalizing on the Health & Wellness Opportunity.” Fresh products are growing 2.5 times faster than products from non-fresh departments at grocery stores and twice as fast at convenience stores. Accordingly, manufacturers are tweaking products to better suit consumers’ increasing desire for fresher, healthier and more convenient choices.


Simply put: The fresh convenience store shopper is valuable. There are distribution challenges, however, when it comes to offering fresh products in the

current convenience store environment. Of the 154,000 c-stores in the United States, 63 percent are single-store operations. Yet, fresh delivery is all about economies of

“In the past, the grocery channel was the place to shop for food,” Campuzano said. Today, the “fresh perimeter” of the grocery store is growing, as disruptions are changing the way people buy food. “Those products that are winning are those that can adapt and grow.” In convenience, 19 percent of dollar growth in the channel is from fresh, which represents 11 percent of dollar sales currently. The fastest-growing fresh products in U.S. c-stores include breakfast sausage biscuits, pre-sliced vegetables, and chicken salad, while the highest absolute dollar growth in fresh products at c-stores is coming from refrigerated sandwiches, breakfast sandwiches, snack cakes, and fresh pastries.

Percent of Shoppers Who Ranked as Important in Influencing Purchase 62%

Made from vegetables/fruits

61%

High in protein

57%

High in fiber

57%

Portion control

57%

Whole grain

Source: Nielsen

WWW.CSNEWS.COM | Guide to Foodservice 25


scale (taking drop size and frequency into account), and fresh products have a shorter shelf life. Hence, single stores face barriers such as: a lack of physical access

26 Guide to Foodservice | WWW.CSNEWS.COM

to quality produce suppliers; quality produce that is prohibitively expensive; minimum purchase requirements; and problems related to distance, such as rural stores not

being able to afford delivery fees or order fresh products that require refrigerated trucks. Additionally, some c-store owners themselves may perceive that their customers don’t want produce from a c-store. Cultural barriers can include language barriers, and the desire for produce specific only to a particular cultural diet, Maglio pointed out. There’s good news, though, in that solutions do exist for those c-store retailers wanting to put in the effort. They can partner with distributors that already deliver non-perishable products to their stores such as frozen foods, or form cooperative purchasing agreements to create “power in numbers,” according to the speakers. Store owners should also be aware that consumer sensitivity to price is changing. People are becoming more willing to pay higher prices for attributes they find desirable. While shelf life remains an issue, suppliers to the convenience store industry are getting more innovative, designing new packaging and implementing new processes to extend shelf life. For instance, pre-packaged produce, rather than whole produce, looks more enticing to customers, is more convenient to eat, and addresses food-safety concerns. Maglio recommends that c-store suppliers and distributors provide initial training to store owners and their staff, along with promotional items and signage for fresh products. Lastly, the presenters noted that “healthy corner store” initiatives exist to provide financial incentives and assistance to c-stores wanting to put in the effort. Such programs include the Healthy Corner Stores Network, and the Healthy Food Financing Initiative. CSN


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Figuring Out the Foodservice at Retail Supply Chain C-stores have myriad choices for foodservice sourcing By Don Longo

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here is no single correct answer when it comes to foodservice supply-chain support. Convenience store retailers have several different sources to consider for their foodservice solutions, and each type of source has its own particular pros and cons for retailers.

Holly Veale of McLane ran down the pros and cons of various c-store foodservice supply sources.

C-store retailers can choose from among traditional foodservice distributors, such as Sysco; broadline distributors such as McLane, Eby-Brown and Core-Mark; or local sources such as commissaries and direct-store distributors, according to Convenience Foodservice Exchange presenter Holly Veale, product director of foodservice for McLane Co. Inc., a leading supply chain services company based in Temple, Texas. Veale has been with McLane for 10 years. Most

28 Guide to Foodservice | WWW.CSNEWS.COM

recently, her team designed, developed and implemented McLane Kitchen and its Fresh Produce+ initiative, the convenience store industry’s first national solution for fresh produce. “Traditional foodservice suppliers offer high frequency of delivery, foodservice expertise, traceability and compliance,” explained Veale, but those benefits come with such drawbacks as increased invoicing and labor costs, higher inventory levels, increased home-office and store labor, and lack of c-store expertise. Local commissaries provide quick turnaround and frequent delivery, but do not provide the consistency of quality across a geographic span that most retail chains seek. They can also be challenged on traceability and regulatory compliance, she said. Broadline distributors offer “dependability, reduced inventory, reduced home-office and store labor, traceability, regulatory compliance, a consistent item mix, and reduced traffic on your store lot,” said Veale. On the perceived con side are decreased delivery frequency and smaller product mix. However, she noted that broadline distributors’ large purchasing power enables them to have a robust item mix. She also highlighted that they understand the c-store business, know how to maximize category management, and already have strong relationships with suppliers. During her presentation, Veale also described how the landscape for food distribution has been impacted by significant government regulation, such as trans-fat labeling requirements in 2003, food allergy labeling mandates in 2004, and the Food Safety and Modernization Act in 2011. All of these have added to the complexities of ensuring a safe supply chain. CSN


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Can Sous Vide Boost C-store Sales?

The cooking method could enable a better foodservice offer with fewer resources By Angela Hanson

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s consumers grow increasingly accepting of convenience stores as a foodservice destination, so too do their expectations of foodservice quality grow. At the inaugural Convenience Foodservice Exchange, Lance Layman, vice president of business development for food solutions manufacturer SugarCreek, presented one new way c-store operators could boost foodservice quality and sales in an efficient manner: sous vide. Sous vide refers to the method of cooking food slowly in a vacuumsealed pouch at a low temperature, in order to retain most of the moisture and flavor. For c-stores, this Source: SugarCreek would let them offer a fully-cooked meat with less shrink, better yields, increased shelf life, improved nutrition, fewer ingredients, and perfect flavor, color, texture and tenderness, Layman said. By offering a menu of sous vide items, convenience stores could build upon the “4 p.m. Fuel-Up,” which refers to food as well as gasoline, he noted. The majority of daily c-store shoppers visit the same store, buy prepared food, and are “incredibly loyal.” But at this time of day, they don’t know what they want for dinner, he explained. Enter sous vide. Operational benefits of sous vide include ease of execution, simple management of fluctuating traffic periods, and increased speed of order to the customer. Plus, the slow process means cooking can occur even

30 Guide to Foodservice | WWW.CSNEWS.COM

when a chef is not available. Sous vide-appropriate cooking equipment includes convection ovens, microwaves, Turbo Chefs or thermalizers, which many convenience stores already have on-hand. Among the economic benefits of sous vide, first and foremost, is better yields — average sous vide shrink is 5 percent, compared to 30 percent for other cooking methods. This method of cooking also conserves energy; can be done with inexpensive cuts of meat (that are made more tender and pleasing to the palate); and uses concentrated seasonings. Overall, sous vide allows foodservice programs to maximize culinary resources while focusing on the end product, according to Layman. CSN


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