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LOGIC OUTPERFORMS CATEGORY TOTAL VAPOR CATEGORY L4 WKS. % CHG. $ UNIT SALES VS. PP

5.3

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TOTAL VAPOR

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VIEWPOINT By Don Longo, Editorial Director

Things to Watch for in 2017 Circle K, Amazon, fuel-less c-stores and dollar stores made headlines in 2016

his is a good time to review some of the highlights of the past year — with a focus on events that were not only significant when they happened, but also are likely to have longer-range ramifications into the New Year. After adding 1,500 stores through its 2015 acquisition of The Pantry, Alimentation Couche-Tard’s deal to purchase CST Brands and its more than 1,000 stores in the United States and Canada is one of those events that is a game-changer. I know there are skeptics who doubt CoucheTard’s ability to rebrand all these stores in North America For comments, please contact to Circle K — not to menDon Longo, Editorial Director, at (201) 855-7606 or tion acquired stores in Norway, dlongo@ensembleiq.com. Denmark, Sweden, Estonia, Latvia, Lithuania, Poland, Russia and Ireland. But, driven by the successful sharing of best practices worldwide, Circle K is poised to shake up the convenience store scene in 2017. Amazon.com’s plans to open brick-and-mortar c-stores and curbside pickup locations also set the industry abuzz in 2016. At the NACS Show in October, our editorial team canvassed the floor asking retailers what they thought of the threat posed by the online retail giant. Opinion was split, ranging from those who see imminent danger to others who minimized the impact. I believe Amazon, which has already disrupted several business models, will bring exciting innovations

to the c-store market even if it doesn’t become a major player as a brick-and-mortar retailer. Two other 2016 events that we are likely to hear more about next year are the opening of fuel-less stores (such as those opened by QuikTrip, Maverik and Sheetz), and Dollar General’s further incursions on the c-store market after buying 41 Walmart Express units this year and revealing plans for opening its first convenience store next year. For the c-store industry, 2016 was a very good year based on sales data we’ve collected through the first nine months. For Convenience Store News, it was also a terrific year. Our third-annual Top Women in Convenience awards event was our biggest and best yet, as about 300 industry professionals came out to celebrate 62 women who are making a positive impact on the c-store industry. I am proud of the role we play in recognizing and fostering the development of women’s careers in convenience. We also launched our inaugural Convenience Foodservice Exchange event. Approximately 50 retailer foodservice executives came together to share success stories, as well as discuss the challenges they face. At the end of the two days, retailers and suppliers came away with crucial insights that will lead to increased sales and improved shopper engagement. And, in the past year, the CSNews editorial staff added seven more journalism awards to our crowded trophy case, including a National Gold Azbee Award. It was a rewarding year for all. I wish you and your families a wonderful holiday season and an awesome New Year.

CSNews has been recognized with more editorial awards, including the prestigious Jesse H. Neal Award for business journalism, in the past nine 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

2016 Eddie Award Honorable Mention, Folio: magazine Business to Business, Retail, Full Issue, October 2015 2016 Eddie Award Honorable Mention, Folio: magazine Business to Business, Retail, Single/Series of Articles, August 2015 2015 Eddie Award Honorable Mention, Folio: magazine Business to Business, Retail, Single Article, February 2014 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 | DECEMBER 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, Midwest Regional Azbee Awards Gold, Best Special Supplement, November 2014 Silver, Best Profile (long form), February 2014 2015 American Society of Business Press Editors, Midwest Regional Azbee Awards 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 DECEMBER 2016

VOLUME 52/NUMBER 12

COVER STORY Creating His Own Legacy

Son of a legendary retailer, Chet Cadieux has made his own mark on the convenience store industry with his people-first philosophy. 30 | Always Striving for Success Even after decades in the c-store industry, The Pinnacle Corp.’s Bob Johnson doesn’t take anything for granted.

19 | Supplier Tidbits 20 | CSNews’ Parent Adds More Media Presence in Canada

HOW TO DO WORLD-CLASS FOODSERVICE 46 | How to Keep Your Foodservice Operations Clean & Safe 46 | Call to Action: Foodservice 101 48 | Call to Action: Foodservice 201 50 | Call to Action: Foodservice 301

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 | DECEMBER 2016 | WWW.CSNEWS.COM

464

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

FEATURES

Group Brand Director (330) 840-9557

38 | A Healthy 2017 Consumers will be looking for better-for-you food, beverage and snack options.

EDITORIAL

TECHNOLOGY

58 | Smartening Up More c-store operators are using technology to capitalize on consumers’ smartphone use.

CATEGORY MANAGEMENT MOTOR FUELS

44 | The Forecourt of the Future Wawa leads the way when it comes to thinking outside the rectangle. TOBACCO

54 | Tobacco Goes to the Ballot Box California tax increase heads to the polls and finally wins voter approval.

DEPARTMENTS VIEWPOINT

4 | Things to Watch for in 2017 Circle K, Amazon, fuel-less c-stores and dollar stores made headlines in 2016. 12 | CSNews Online 22 | New Products

Ron Lowy rlowy@ensembleiq.com

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

EVENTS • MARKETING • DIGITAL • RESEARCH • CIRCULATION Vice President/Custom Media Division Pierce Hollingsworth (224) 632-8229 phollingsworth@ensembleiq.com Strategic Marketing Director Bruce Hendrickson (224) 632-8214 bhendrickson@ensembleiq.com Director of Production Kathryn Homenick (973) 358-4875 khomenick@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 President & CEO Chief Financial Officer

STORE SPOTLIGHT

64 | Its Own Little Corner of the World CornerStone Market brings Little Oil Co. back to c-store operations after 20 years.

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

Chief Customer Officer Chief Business Development Officer Chief Digital Officer

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

EXPERT’S VIEW

70 | The Leader’s Mission: Bring Other Women With Her Kellogg’s Tracy Joshua offers insights on gender and race in the workplace. 82 | Getting to the Core

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

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 Inc.

Kyle McKeen Alon Brands Inc.

Roy Strasburger Convenience Management Services Inc.

Richard Mione GPM Southeast

Jon Urbanik CST Brands Inc.

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

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LOGIC OUTPERFORMS CATEGORY TOTAL VAPOR CATEGORY L4 WKS. % CHG. $ UNIT SALES VS. PP

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TOTAL VAPOR

1.1

% Chg U

% Chg $

LEADING THE CHARGE

+17 % % CHG UNITS VS. PP

+3.2 % % CHG UNITS VS. PP

+5.6 % % CHG UNITS VS. PP

+22.6 % % CHG UNITS VS. PP

Source: Logic calculation based on Nielsen AOD reporting. Unit Share, 4wks ending 10/08/16, Total AOC Including C-Store

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CSNEWS.COM TOP 5 Daily News Headlines

ONLINE EXCLUSIVE

The most viewed articles online. 1 | The Future of Convenience Is Food Food. It’s essential to existence — not just in the broader sense as humans, but also in regards to the convenience store industry. That was the message Jack Kofdarali, outgoing chairman of NACS, the Association for Convenience & Fuel Retailing, relayed at the 2016 NACS Show. 2 | Can You Make Money on Renewable Fuels? Three experts on the renewable fuels market pointed out at the 2016 NACS Show that there are literally hundreds of millions of dollars in federal and state grants, credits and tax breaks available to help retailers fund their expansion into next-generation fuels. Retailers looking to upgrade their current equipment, such as replacing old dispensers with EMV-capable ones, can do so at almost no cost. 3 | Three Solutions to Speed Up EMV Transactions The U.S. Payments Forum issued a new white paper that provides information for retailers and consumers, including outlining three ways EMV transaction speeds can improve. Titled “Optimizing Transaction Speed at the POS,” the document states that there is a significant disparity in the processing time of EMV transactions, ranging from as little as two seconds to more than 20 seconds, depending upon the retailer. 4 | What BAT’s Bid for Reynolds Could Mean for Big Tobacco On Oct. 21, British American Tobacco (BAT) made an offer to acquire Reynolds American Inc. (RAI) for $47 billion, but that’s just the opening bid. And it could trigger additional deals. “While we have long discussed the possibility of BAT acquiring the remaining 57.8 percent of RAI it does not currently own, we believe BAT’s current offer — $24.13 in cash and 57 percent in BAT stock, valuing RAI at $56.60 a share as of Oct. 20 will need to be sweetened,” said Bonnie Herzog, managing director of tobacco, beverage and convenience store research at Wells Fargo Securities LLC.

Creating a Stir

The coveted cup of Joe is stirring up better convenience channel practices. It’s how many customers start off their day, so it makes sense that it’s how many convenience stores start off their foodservice program. “Coffee is one of the most profitable products for foodservice operators. It is also habit-forming, which bodes well for loyal customers daily,” Tim Powell, senior analyst at Q1 Consulting in Chicago, told Convenience Store News. “C-stores that develop a strong coffee program can then transition into offering complementary graband-go food items, such as baked goods and breakfast sandwiches. Coffee is really the entry into prepared foods and a good method for retailers to determine the levels of traffic they can expect.” For more exclusive stories, visit the Special Features section of www.csnews.com.

PRODUCT HIGHLIGHT The most viewed New Product online.

M&M’S Caramel Chocolate Candies

The M&M’S brand will enter the soft and chewy category with the launch of M&M’S Caramel Chocolate Candies. The treat features a creamy caramel center that’s covered in milk chocolate and enclosed in a colorful candy shell. M&M’S Caramel will be available in 1.41-ounce singles packaging for a suggested retail price of $1.09 to $1.39, varying by market. A major consumer marketing campaign will support the May 2017 launch, including television, radio and print ads; digital/social; e-coupons; sampling; and in-store displays.

5 | Sheetz Now Delivers to Your Doorstep Sheetz Inc. customers in the college towns of Morgantown, W.Va., and State College, Pa., can now place orders from local Sheetz convenience stores and have them delivered to their doorsteps. The retailer is partnering with OrderUp from Groupon.

Mars Chocolate North America Hackettstown, N.J. (908) 852-1000 www.mars.com

ANALYSIS: What President Trump Means for C-store Industry Joe Kefauver, managing partner of Align Public Strategies, provides his perspective on the results of the 2016 presidential election. “While some priorities for entrylevel employers may be in alignment with the Trump Administration, it will not be the Chamber of Commerce or other traditional institutions representing the business community driving the policy of the new president. Entrylevel employers, and really all of corporate America, are 12 Convenience Store News | DECEMBER 2016 | WWW.CSNEWS.COM

left with more questions than answers as they try to distill what happened and what it means for their businesses,” he writes. “Simply put, an unexpected Republican wave up and down the ballot crashed what Democrats believed was certain victory. It is almost impossible to overstate just how unprecedented this election is historically. We have departed from the conventional qualifications and expectations for president and entered a new era of American politics.”

INDUSTRYROUNDUP FAST FACT

Tesoro’s Portfolio to Top 3,000 Retail Sites Signs a $4.1-billion acquisition agreement with Western Refining Only 40 percent of convenience store chains are currently EMV compliant at the point-of-sale. However, the remaining 60 percent said they have at least begun the compliance process. Source: Convenience Store News 2016 Technology Study (page 58)

QUOTABLES

“I work every day to try to create opportunities for success for our people. It is a great reason to get out of bed in the morning, and I have my dad to thank for helping me find that purpose.” — Chet Cadiuex, QuikTrip Corp. (page 26)

esoro Corp. and Western Refining Inc. finalized a definitive agreement for Tesoro to acquire Western Refining for $4.1 billion. The transaction was unanimously approved by the boards of directors for both companies. Once completed, the acquisition will give Tesoro refineries in Texas, New Mexico and Minnesota, in addition to its existing refineries in California, Washington, Alaska, Utah and North Dakota. The combined company will have a refining capacity of more than 1.1 million barrels per day, and create a leading multi-brand marketing and convenience store portfolio in growing geographies with more than 3,000 combined branded retail sites. The total deal is valued at $6.4 billion and includes the assumption of approximately $1.7 billion of Western Refining’s net debt and the $605-million market value of the company’s non-controlling interest in Western Refining Logistics LP. “The acquisition of Western further strengthens our integrated business model and extends our portfolio into attractive and growing markets,” said Greg Goff, chairman and CEO of Tesoro. “As a leading integrated refining, marketing and logistics company, this transformative acquisition

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

drives value through a combination of access to advantaged crude oil; a strong, multi-brand marketing and convenience store portfolio; and a robust platform for logistics growth, all of which will allow us to continue to create shareholder value.” Tesoro’s increased scale and diversity will enable the company to leverage and enhance in-house technical capabilities, which it expects to result in cost efficiencies, the ability to drive more growth, and increased productivity, Goff added. “This strategic combination provides our shareholders with the opportunity to participate in the tremendous future growth prospects and synergies of the combined company,” added Paul Foster, executive chairman of Western Refining. “Joining forces with Tesoro, a company that shares our integrated business model strategy, will enable us to further leverage our capabilities in refining, marketing and logistics operations, and allow our talented team to work on a growing number of exciting opportunities,” Foster continued. “We have tremendous respect for the Tesoro team and are excited to be a part of a larger and more diverse organization to support our continued growth.”

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INDUSTRYROUNDUP

Dollar General Will Enter C-store Business DGX-branded store to offer immediate-consumption, convenience fare Dollar store chain Dollar General Corp. is going big in the form of a new small-format convenience store concept. Tentatively branded DGX, the first of these new, smaller concept stores is expected to open in downtown Nashville, Tenn., in early 2017. The 3,400-square-foot store will offer typical c-store fare, including immediate-consumption items like fountain soda, coffee, candy, snacks and grab-and-go sandwiches. DGX will also offer an assortment of limited items, like pet supplies, paper products, home cleaning supplies, an expanded health and beauty section, electronics, and home and seasonal products. The DGX store will also include a checkout lane geared toward a high-volume, smaller basket. Existing Dollar General stores typically occupy approximately 7,000 square feet. This move to a smaller format is the latest action in the retailerâ&#x20AC;&#x2122;s plan to expand by 2,200 stores over the next two years for a

total of more than 14,000 stores. As of Oct. 28, Dollar General operated more than 13,000 stores in 43 states. In 2017, the Goodlettsville, Tenn.-based company expects to open 1,000 new stores, in addition to plans to relocate or remodel 900 existing stores. Dollar General is planning to open a second DGX store in Raleigh, N.C., in early 2017.

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INDUSTRYROUNDUP

eye on growth n Stockholders of CST Brands Inc.

approved the proposed acquisition of the company by Alimentation Couche-Tard Inc. in a Nov. 16 vote. Approximately 99.7 percent of the shares voted were cast in favor of the deal.

Chevron Corp.’s refining, distribution and retail assets in Hawaii. Existing Chevron-branded gas stations in the Aloha State will be converted to Chevron’s Texaco brand. n Mega! CO-OP agreed to buy five Travel Stop locations

n A U.S. subsidiary of Compañía de Petróleos de Chile

COPEC S.A. (COPEC) closed on its $535-million purchase of MAPCO Express Inc. from Delek US Holdings Inc. MAPCO has 348 corporate-owned convenience stores.

in Wisconsin. The new owner will operate these stores under a Mega! CO-OP Travel Stop banner, while maintaining the Shell and BP branded fuel they currently offer. n Wawa Inc. opened its 500th gas

n GPM Investments LLC and its affili-

ates closed on an acquisition deal with Admiral Petroleum Co. for 137 convenience stores with fuel and 33 discount tobacco shops in Michigan and Indiana. GPM will continue to operate these stores under the current Admiral and Admiral Discount Tobacco brand names. n Island Energy Services completed its acquisition of

store, located in Cheltenham, Pa., on Nov. 10. The store comes 20 years after the retailer first added fuel to its offering. n Love’s Travel Stops & Country Stores Inc. reached a

milestone with the opening of its new Love’s Travel Stop in South Holland, Ill., which pushed its portfolio to the 400 mark. Love’s is on track to close out 2016 with 50 new stores opened this year.

retailer tidbits n TravelCenters of America LLC

formed a new TA Truck Service Commercial Tire Network. The new network, which launched Nov. 4, expands the number of tire brands and tiers that TravelCenters now offers to its customers.

Swiss Farms Rooster mascot. The Swiss Farms Rooster has been a key element of the drive-thru convenience store chain’s branding and logo for nearly 50 years. n Sinclair Oil Corp.’s Dino

n Murphy USA Inc. completed its

300-store refresh program in November. Improvements included LED lighting, the addition of super coolers, and a new security system. n OnCue Express and Omaha Gas & Electric partnered

to pilot the installation of a Level 3 electric vehicle fast-charging station at an OnCue site in Yukon, Okla. During the pilot period, vehicle charging will be complimentary to customers. n Swiss Farms is seeking customer input to name the

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

mascot took a cross-country road trip to the 90th Macy’s Thanksgiving Day Parade in New York. The iconic mascot made stops in California, Las Vegas, Utah, Wyoming, Nebraska, Missouri, Kentucky and New Jersey along the way. n CITGO Petroleum Corp. entered into a partnership

with ZipLine to launch the CITGO Check Card, a debit/ACH payment program that combines rewards with payments in-store and at the pump. CITGO Check Card members can save 1 percent on purchases.

legislative corner Election 2016 Brings Wage Increases in Four States Washington State hike was the largest one on the ballot this year Voters who headed to the polls on Nov. 8 checked “yes” on ballot measures in four states that will usher in minimum-wage increases over the next few years. In Arizona, voters gave a collective thumbs-up to Proposition 206, also known as The Minimum Wage and Paid Time Off Initiative. The measure — approved by a 59 percent to 41 percent tally — will raise the state’s minimum wage to $10 in 2017, and then incrementally to $12 by 2020. Arizona’s current hourly wage is $8.05. It also creates the right to paid sick time off from employment. This component of the law will go into effect July 1, 2017. Staying in the west, Colorado voters approved Amendment 70 — 54.4 percent of those at the polls

voted yes. The measure raises the minimum wage from $8.31 to $9.30 per hour in 2017, and then increases it by another 90 cents each year until the wage reaches $12 in 2020. In Washington State, 59 percent of voters checked the “yes” box for The Washington Minimum Wage Increase, also known as Initiative 1433. The measure increases the state’s minimum wage from $9.47 to $13.50 by 2020, and mandates that employers offer paid sick leave. This hourly wage hike was the largest one on the ballot in this year’s election. Moving to the east, Maine voters supported The Maine Minimum Wage Increase, also known as Question 4. The initiative will gradually increase the state’s minimum wage to $12 by 2020. Maine’s minimum wage now stands at $7.50.

supplier tidbits n Reynolds American Inc. (RAI) rejected a $47-billion

acquisition offer from British American Tobacco plc (BAT). The company deemed the offer amount too low. BAT already owns 42.2 percent of RAI. n Altria Group Inc.’s operating company John

Middleton Co. will transfer its existing operations in Pennsylvania to Richmond, Va. In addition, Altria operating company U.S. Smokeless Tobacco Co. will transfer its current Illinois operations to a Nashville, Tenn., facility and the Altria Group manufacturing center site in Richmond. n PepsiCo Inc. and The Coca-Cola Co. are the top

beverage companies on the 2016 Kantar Retailer PoweRanking list at No. 1 and No. 2, respectively. This marks their highest-ever historical rankings in the annual benchmarking study. n Heineken USA Inc. will launch Five Points Trading

Co., a new venture aimed at incubating a range of

popular global beers in the United States. Five Points Trading Co. will assume U.S. importer of record responsibility for Red Stripe, Tiger, Birra Moretti, Affligem, Murphy’s Stout, Prestige, Sagres, and Mort Subite. n Talking Rain Beverage Co., maker of

Sparkling Ice, teamed with DreamWorks Animation in support of the November release of the film “Trolls.” Sparkling Ice kicked off an “UnconTROLLable Flavor” campaign that includes a sweepstakes, limited-edition product packaging, advertising and instore marketing support. n Swedish Match held a grand-opening celebration

for its newly expanded Owensboro Research & Development Center in Owensboro, Ky. The $3.5-million, 10,000-square-foot expansion includes a twostory manufacturing facility.

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

INDUSTRYROUNDUP

CSNews’ Parent Adds More Media Presence in Canada EnsembleIQ acquires multiple titles from Rogers Media EnsembleIQ, parent company of Convenience Store News, continues to grow its portfolio of leading media brands. In its latest move, the Chicago-based company acquired Canadian Grocer, Pharmacy Practice+, Profession Santé, The Medical Post and other allied brands from Canadian media and communications company Rogers Media. “We’re thrilled to have such powerful titles join our portfolio of brands,” said EnsembleIQ CEO and President Peter Hoyt. “Not only do they align perfectly in serving some of our key markets throughout North America, but they have a rich history of helping their readers and advertisers find success in their careers, which is the primary objective of EnsembleIQ.” The transaction was led by Korry Stagnito, who has been named president of EnsembleIQ-Canada. He also takes on the position of EnsembleIQ’s chief business development officer. In this role, Stagnito

will spearhead all of the company’s future merger-andacquisition activities. The brands acquired from Rogers Media provide a strategic complement to EnsembleIQ’s U.S. media titles that include Convenience Store News, Progressive Grocer, Shopper Marketing, Retail Leader and The Gourmet Retailer, as well as Canadian titles such as Pharmacy Business, PharmacyU.ca and Your Convenience Manager. EnsembleIQ — a portfolio company of RFE Investment Partners — is a premier business intelligence resource that exists to help people and their organizations succeed. It is structured to serve the business-tobusiness needs of retailers, consumer goods manufacturers, technology vendors, marketing agencies and retail service providers by using its integrated network of media and information resources designed to inform, connect and provide actionable marketplace intelligence.

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Swedish Match’s ZYN tobacco-free nicotine pouch is now available throughout the western United States. The nextgeneration nicotine pouch provides a smoke-free, spit-free and tobacco leaf-free experience, the company stated. ZYN contains nicotine that’s derived from tobacco leaves and food-grade ingredients. It comes in six flavors: cool mint, wintergreen, cinnamon, peppermint, spearmint and coffee. All flavors are available in two nicotine strengths: 3 milligrams or 6 milligrams. Packaged in a child-resistant round can, ZYN is now being sold in 4,000-plus stores in Arizona, California, Colorado, Idaho, Montana, New Mexico, Nevada, Oregon, Utah, Washington and Wyoming.

Inline Plastics expands its Safe-T-Fresh line of packaging with the introduction of Safe-T-Fresh RoundWare. The hinged clamshell containers, with a 4-inch diameter, are all one piece and come in five popular sizes: 8-, 12-, 16-, 24- and 32-ounce. RoundWare features Safe-T-Fresh’s tamper-evident, tamper-resistant technology, and is designed with Safe-T-Fresh’s SureGrip Technology for ease of handling and resealing. Made from 100 percent recycled DPET material, RoundWare will appeal to consumers who desire environmentally responsible packaging, the company stated.

Swedish Match North America Inc. Richmond, Va. (804) 787-5100 info@smna.com www.swedishmatch.com

Red Bull Sugarfree Editions Red Bull will launch two sugarfree options in January: Red Bull Purple Edition Sugarfree, which features the taste of acai berry, and Red Bull Lime Edition Sugarfree, which tastes like limeade. The introduction of these sugarfree beverages provides consumers with the choice of sugar vs. no sugar content, especially for those looking for flavor and low-sugar offerings, Red Bull stated. Also in January, the company will add this summer’s limited-edition Red Bull Summer Edition Kiwi Twist as a permanent SKU called the Red Bull Green Edition. The energy drink features the taste of kiwi apple. Red Bull North America Santa Monica, Calif. (310) 393-4647 info@redbull.com www.redbullusa.com

Inline Plastics Corp. Shelton, Conn. (800) 826-5567 www.inlineplastics.com

CT PROformance 20-20 Combitherm Oven Alto-Shaam adds the CT PROformance 20-20 Combitherm oven to its line of Energy Star models. Part of the company’s fully integrated banqueting system, the CTP 20-20 is equipped with a roll-in cart that allows users to cook food and then roll it into the compatible AltoShaam CombiMate Mobile Warmer or QuickChiller blast chiller. The CT PROformance 20-20 Combitherm joins other Alto-Shaam Energy Star models, including the CTP10-20G, CTP7-20E, CTP7-20G and CTC7-20G. On average, Energy Star models are 30 percent more energy efficient than standard models, according to the company. Alto-Shaam Inc. Menomonee Falls, Wis. (800) 558-8744 www.alto-shaam.com

Chef’s Cut Real Snack Sticks Chef’s Cut Real Jerky expands its chef-created meat snacks line with the introduction of Chef’s Cut Real Snack Sticks. Made from premium meat, Chef’s Cut Real Snack Sticks will launch in four flavors, including two beef and pork varieties — Original Smokehouse and Jalapeno Cheddar — and two chicken varieties — Barbeque and Buffalo Style. Like all Chef’s Cut Real Jerky products, the sticks are nitrite- and gluten-free, the company noted. Chef’s Cut Real Jerky New York (877) 210-2575 www.chefscutrealjerky.com

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

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NEWPRODUCTS Sparkling Ice Grape Raspberry

Mega S’mores

Sparkling Ice Grape Raspberry is the 16th flavor to join the Sparkling Ice brand’s portfolio. The beverage balances grape and raspberry flavors with the right amount of fizz, maker Taking Rain Beverage Co. stated. Grape Raspberry was developed in direct response to consumer demand. It will be available nationwide starting in January.

Mega S’mores by Hunt Brothers Pizza is a take on the traditional campfire favorite, but for on-the-go convenience. The fresh-baked sweet treat features gooey Hershey’s real milk chocolate and melted marshmallows surrounded by a giant, soft, graham cracker crust. Mega S’mores is designed to serve as a complement to Hunt Brothers Pizza’s selection of pizza, wings, WingBites and Cheesebread. The new product is available at participating Hunt Brothers Pizza retailers nationwide for a suggested retail price of $1.59.

Talking Rain Beverage Co. Preston, Wash. (800) 734-0748 www.talkingrain.com

Genuine Broaster Chicken Spicy Genuine Broaster Chicken Spicy by Broaster Co. capitalizes on the current growth of spicy flavor profiles. Made with tender and juicy Genuine Broaster Chicken, the new menu item is marinated in a Chickite Spicy Marinade that infuses the flavors of Hatch Chili Pepper, Habanero Pepper and Chipotle Chili. It is then finished with a Slo-Bro Spicy Coating to add extra heat by combining Hatch Chili Pepper and Habanero Pepper with a special blend of other seasonings. To accompany the new Genuine Broaster Chicken Spicy, the company offers a line of dipping sauces, including an upgraded ranch sauce. Marketing and point-of-purchase materials are available. Broaster Co. Beloit, Wis. (608) 365-0193 www.broaster.com

Hunt Brothers Pizza Nashville, Tenn. (800) 453-3675 marketing@hbpizza.com www.huntbrotherspizza.com

Cookie Layer Crunch Bars Cookie Layer Crunch Bars from The Hershey Co. contain layers of crunchy cookie bits and decadent filling, surrounded by smooth and creamy Hershey’s chocolate. Three varieties are available nationally beginning this month: Caramel, Vanilla Crème, and Mint. Each two-piece, 1.4-ounce bar has a suggested retail price of 99 cents, while a 3.5-ounce “XL Bar” that can be broken into five pieces has a suggested retail price of $2.89. The company has labeled this launch the most anticipated innovation to come from Hershey in 16 years. The Hershey Co. Hershey, Pa. (800) 468-1714 www.thehersheycompany.com

Excentus Loyalty Program for C-stores Excentus Corp. is expanding its Fuel Rewards loyalty-program services to meet the needs of the growing convenience store sector. The Excentus platform allows c-store operators to modernize, deploy and manage custom-built, fully branded loyalty programs that deliver a variety of offers and rewards for today’s competitive, mobile-first environment, the company said. Programs on the Excentus platform can support discounts, coupons, bonus rewards and Fuel Rewards program integration; easily launch iOS and Android apps; and leverage existing programs by using a single, integrated platform that manages all loyalty program content and activities, like rewards management, promotions, CRM, marketing, segmentation, data and reporting. C-store operators can also access more customers through mobile, targeted and geo-location marketing initiatives, as well as leverage data and consumer analytics to measure loyalty program success and adjust offers to improve engagement, activity and return on investment. Excentus Corp. Dallas (972) 793-6800 www.excentus.com 24 Convenience Store News | DECEMBER 2016 | WWW.CSNEWS.COM

HIGH-FIVES ALL AROUND.

Congratulations to our own

Victoria and Jeanne

on being named two of the Top Women in Convenience.

Victoria Person-Goral RJRT Area VP Southern Sales Area

Jeanne Swisher RJRT Account Executive

Building relationships. Building growth.

Creating His Own Legacy Son of a legendary retailer, Chet Cadieux has made his own mark on the convenience store industry with his people-first philosophy By Don Longo

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

cover story

he convenience store industry is often viewed as a family affair. There were the Thompson brothers who drove the early growth of 7-Eleven. There’s Sheetz (a whole slew of family members including Steve, Stan and current CEO Joe); E-Z Mart’s Yates (founder Jim and current CEO, daughter Sonja Hubbard), RaceTrac Petroleum’s Bolch (Carl Senior, Junior and current CEO, daughter Allison Moran). And many more. No family name, though, holds a higher place in the pantheon of c-store industry leaders as Cadieux. The Convenience Store News Hall of Fame was launched in 1987, with the goal being to recognize convenience store industry pioneers and innovators from retailer and supplier companies of all sizes. The late Chester Cadieux, founder and chairman of QuikTrip Corp., based in Tulsa, Okla., was the first inductee. In many ways, Chester was the model for every other Hall of Famer who came after him. The entire convenience store industry owes a lot of its success to Chester, who raised convenience and fuel retailing to an art form. This year’s retailer Hall of Fame inductee, Chet Cadieux III, has not only carried on his father’s legacy of innovation and success, but he’s enhanced it. Chet has taken a company and platform built by his father and “taken it to new and extraordinary heights,” while redefining convenience, said Hank Armour, president and CEO of NACS, the Association for Convenience & Fuel Retailing. Armour, himself a 2004 inductee of the CSNews Hall of Fame, was among more than a dozen industry leaders and past Hall of Famers in attendance at this year’s Hall of Fame induction dinner in Tulsa, along with 70 QuikTrip employees and family members. Chet, a Tulsa native, today serves as chairman, president and CEO of the company founded by his father in 1958. With annual sales in excess of $12 billion, QuikTrip is the 28th largest privately held company in the United States. It currently operates more than 725 stores primarily in major cities includ-

ing Tulsa, Kansas City, Wichita, Des Moines, St. Louis, Atlanta, Dallas, Phoenix, Tucson and, most recently Greenville, S.C., and Charlotte, N.C. A 1995 Hall of Famer, Steve Sheetz and his family have been friends with the Cadieux family for many years. “Chester taught us the gas business,” recalled Sheetz, who serves as a member of the QuikTrip board of directors. “On a personal level, Chester taught us it’s all about the people.” When leadership transitioned from Chester to Chet in 2002, the son’s people skills were put under the microscope. In fact, for all of QuikTrip’s industryleading innovations, it was Chester’s determination to make QuikTrip a better place to work for his employees that might be his greatest lasting contribution. It’s a testament to son Chet that QuikTrip this year was included on Fortune’s list of the “100 Best Companies to Work for in America” for the 14th consecutive year. “We knew he [Chet] had the skills to lead the company, but we wondered how he is on the people side of the business,” Sheetz said about the transition process. “Our concerns were misplaced. Chet lives the QuikTrip core values: be the best; do the right thing; never be satisfied; focus long-term; and do what’s best for QuikTrip.” Sheetz noted that although the company’s growth — in both number of stores and breadth of offer — has been impressive, “even more impressive is the growth of its people. I’m amazed, and I shouldn’t be, how much QuikTrip employees love their jobs and their company.” He called Chet a great leader. “We know how proud your father was of you,” Sheetz added. Smart competitors also hold Chet and QuikTrip in high regard. “The first day I started at Kwik Trip, [our CEO] Don Zietlow said to go look at QuikTrip and look at what they do with their people,” shared Steve Loehr, vice president for the La Crosse, Wis.-based Midwest retailer whose co-founder Zietlow was the 2015 CSNews Hall of Fame inductee. “We hold you and your company in high regard for many reasons, but the main one is your people.” The supplier community, too, recognizes how QuikTrip’s core values enhance their partnerships.

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

cover story

A Chat with 2016 Hall of Famer CHET CADIEUX Convenience Store News: Looking back, when did you realize that the convenience store industry was the right career for you to pursue? Cadieux: I was 18. I had been working in the stores for a couple of years at that point. I really enjoyed working in that environment and gained a deep appreciation for how much work it took to run a great store. That made me want to figure out some way to contribute to the company. CSNews: Who had the greatest influence on your business life, and what did you learn from him/her? Cadieux: That’s easy. My dad. Most of what I know came from him, either directly or through someone else he had worked with in the company. He taught me the true joy that can be found from genuinely caring about your employees. I work every day to try to create opportunities for success for our people. It is a great reason to get out of bed in the morning, and I have my dad to thank for helping me find that purpose. CSNews: What brings you the most satisfaction when you look back on your business career? Cadieux: Knowing that we’ve made a difference in the lives of thousands of employees and their families. CSNews: The current industry trend is to upgrade and expand foodservice offerings. Where do you see the industry going in the future? How far will c-stores push foodservice? Are there other trends that will impact the business? Cadieux: I think that it will be very interesting to see how the two trends of increasing foodservice and increasing wages intersect. Labor inflation may very well be what limits the amount of foodservice growth that many in our industry are capable of achieving. CSNews: What has made QuikTrip stand out as a leader among so many other companies in the c-store industry? What’s the company’s differentiating characteristic, in your opinion? Cadieux: Again, that’s easy. Our people. I know that a lot of people say that, but I really think that our employees are extraordinary. Whether they are a store team member, a maintenance tech, a computer programmer, an accountant, a truck driver, a warehouse employee, a kitchens employee, a recruiter, a supervisor — from top to bottom, I’d put my peeps up against anybody cause I KNOW they are gonna get the job done.

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

The Hall of Fame gala was a family affair for inductee Cadieux. Pictured from left to right: Keil and Chris Cadieux, Michael and Cheri Steele, Chet and Cassie Cadieux, and DB Wilkins and Carey Ward.

“Chet Cadieux has created a positive vision and plan in his organization that he, his leadership team and all the team members have built into their everyday operations,” explained Pat Cordle, vice president of BIC USA and a 2011 CSNews Hall of Fame inductee. “Chet’s leadership and communication style have resulted in a loyal and dedicated QuikTrip team and a partnered supplier community. As a business partner, Chet and his team have challenged us to deliver our best and be a better supplier to the convenience store industry.” The industry’s newest Hall of Famer concluded his acceptance speech at the Nov. 14 induction ceremony thusly: “It is a huge honor to accept this on behalf of QuikTrip. My father built an incredible company with an incredible team and he knew even I couldn’t screw it up. I’m really blessed. I got to grow up and work for a company like QuikTrip and work with these people — some of whom I’ve known since I was in diapers. They have done amazing things.” CSN

QuikTrip, an early innovator in bringing fuel to the c-store industry, is now a leader in the fast-growing foodservice category with its QT Kitchens concept.

CONGRATULATIONS CHAD CADIEUX!

Chet Cadieux, Hall of Fame Inductee Quiktrip Corp. Chairman, President, CEO Logic congratulates you as the 2016 Convenience Store News Hall of Fame Inductee! We thank you for your partnership, and wish you the best.

WARNING: This product contains nicotine derived from tobacco. Nicotine is an addictive chemical. Intended for use by adult smokers of legal smoking age. Underage sale prohibited.

cover story

Always Striving for Success

Even after decades in the c-store industry, The Pinnacle Corp.’s Bob Johnson doesn’t take anything for granted By Angela Hanson

s the founder and CEO of The Pinnacle Corp., a leading supplier of e-commerce solutions and automation technology, Bob Johnson describes himself as having always had an entrepreneurial bent. Yet one of the things that keeps him in the convenience store industry after decades is his appreciation for the way its members come together to improve matters across the board. Johnson, this year’s supplier inductee into the Convenience Store News Hall of Fame, had a knack for computers going back to high school, “back before there really were computers,” he said. And he pursued a career with them after graduating from Iowa State University. He first got involved with convenience stores in the early 1980s when he was writing software for a company that created point-of-sale equipment and expanded from quick-service restaurant franchises to 7-Eleven stores. When Johnson’s position there ended, he had the opportunity to move on to a different industry, but he chose to stay and founded Arlington, Texasbased Pinnacle. “What impressed me the most back then was the collective industry’s willingness to improve each other’s businesses, even though many times they would be

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

Congratulations Chet Cadieux & Ari Haseotes on taking leadership

AGDC would like to congratulate the 2016 Inductees into the Convenience Store News Hall of Fame Chet Cadieux, President & CEO, QuikTrip Corp. Ari Haseotes, President & CEO, Cumberland Farms, Inc.

Our People | Our Brands | Your Success

cover story

competing with each other,” Johnson told CSNews. It was a significant difference from what he was accustomed to seeing in the restaurant, grocery and drugstore markets. “It just had a different feel, from an industry perspective, that I really liked. Since I’d been working at it, I thought I’ll just try and stay in this industry. And now 26-27 years later, I’m still here.” NACS President and CEO Hank Armour, who was heading West Star Corp. at the time, was one of those who provided guidance in those early years. Johnson noted that Armour was particularly helpful as Pinnacle built the concepts that its original products were based on. “We started with really nothing,” Johnson said. “That’s been rewarding, but certainly had its share of struggles over the years.” Today, with decades of success cementing Pinnacle’s position in the c-store industry, an average week in Johnson’s life includes a lot of meetings. But there’s also a lot of variety in what he does. He prefers to stay actively involved in many aspects of the company, from marketing to new product development to meeting with clients. Johnson is careful not to think of success as an inevitability. “My wife still wants me to go out and get a regular job so I’m not sure that I’ve gotten there yet,” he Johnson said with a laugh. “I think gave special thanks to his you’re in trouble when you wife and high school start to think of yourself as being sweetheart Judy during his successful. We’ve made it and most startaward acceptance speech. ups fail within the first few years, so from that perspective we’ve been really fortunate. I’ve had a great team to work with and some really fantastic client companies that we’ve worked with over the years. And the industry’s been really good to us.” In addition to business success, Johnson and Pinnacle have been recognized by numerous industry awards programs. In 2012, Johnson was inducted into the PCATS (now Conexxus) Technology Hall of Fame, and Pinnacle is a four-time winner of Microsoft’s Retail Application Developer Award. Looking to the future of c-stores, Johnson is particularly fascinated by the industry’s continued evolution of foodservice, which he calls “one of the future pillars of the industry.”

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

Bob Johnson is welcomed into the supplier wing of the Hall of Fame by Convenience Store News Editorial Director Don Longo.

The development of electric cars and driverless vehicles is also likely to have an impact on the c-store industry, the new Hall of Famer predicts. “It wouldn’t surprise me in 15-20 years if demand is quite different,” he said. Johnson cites the implementation of technology in c-store operations as one of the biggest changes he has personally witnessed. When he entered the business, c-stores were seen as lagging behind on almost any technology front that one could list, but the very nature of c-store retailers caused that to change. “They’re an entrepreneurial group and they’re very nimble and innovative, so they’ve embraced tech and they’ve implemented technology across their entire enterprise in ways that many other retail formats haven’t done,” Johnson said. “We’ve gone from being tech laggards to being tech leaders, and being some of the most innovative retailing that’s out there.” According to Johnson, one of the advantages the c-store industry has that enables this kind of sweeping change is the fact that it is not designed around a product; it’s designed around the concept of convenience and giving consumers back time in their days. “Increasingly, time is the most important commodity that any of us have, so I think consumers value that more than ever,” he said. This applies whether retailers are selling gasoline, Twinkies or lottery. “It’s not about the products you sell; it’s how convenient is what you’re doing in the eyes of the consumer. I think for the most part, the industry pays a lot of attention to that.” CSN

CONGRATULATIONS Chet Cadieux of

Inductee of the 2016 Convenience Store News Hall of Fame

Building relationships. Building growth.

cover story

1 1. Convenience Store News Editorial Director Don Longo.

2. Seated: Bob Sears of Altria,

Stan Sheetz, Sonja Hubbard of E-Z Mart Stores and Steve Loehr of Kwik Trip.

Bill Douglass of Douglass Distributing, Pat Cordle of BIC, Jay Ard of Coca-Cola, and Bob and Judy Johnson of Pinnacle. Standing: Longo and CSNews Brand Director Ron Lowy.

8. Ashley Haseotes looks on as

3. Retailer Executive of the Year

industry leadership were presented.

her husband is honored.

9. Three awards celebrating

Ari Haseotes of Cumberland Farms (left) with Danilo Portal of ZipLine.

10. Haseotes (far right) with

4. Past supplier Hall of Famers

his family and the Cumberland Farms leadership team.

Ard and Sears.

5. This year’s CSNews Hall

7. NACS’ Hank Armour with

11. Steve Sheetz shared some words of admiration about Cadieux.

of Fame gala celebrated the 30th anniversary of the awards program.

12. Past retailer Hall of Famer

6. Past retailer Hall of Famers

Douglass (left) with Tim Bentas of Cumberland Farms.

Stan (left) and Steve Sheetz.

13. The men of the hour: Cadieux (left) and Johnson.

11 10 34 Convenience Store News | DECEMBER 2016 | WWW.CSNEWS.COM

4 3

5 8 6

7 9

WWW.CSNEWS.COM | DECEMBER 2016 | Convenience Store News 35

A Healthy 2017

Consumers will be looking for better-for-you food, beverage and snack options By Tammy Mastroberte

he popularity of healthier or better-foryou products in the food, beverage and snack categories has been on the rise for a while now, and it’s affecting all industries that sell these segments — this includes convenience stores. For the past 10 years, the International Food Information Council (IFIC) has done its annual Food and Health Survey among consumers representing the United States population, and each year healthfulness of products landed in third place behind taste and price as the main factors that drive purchase behavior. However, between 2015 and 2016, healthfulness has been on an upward trend, Liz Sanders, associate director of nutrition and food safety at IFIC, told Convenience Store News. This year also saw NACS, the Association for Convenience & Fuel Retailing, publish a new online toolkit for retailers, created by the association and Cornell University’s Food and Brand Lab, focused entirely on the better-for-you and healthy segment. Titled “Ideas That Work to Grow Betterfor-You Sales,” it includes specific c-store examples of evidence-based practices and can be accessed at NACSOnline.com/refresh. “We have been paying attention to the healthier products trend longer than we have been doing some-

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

thing about it,” noted Jeff Lenard, vice president of strategic industry initiatives for NACS. “In the last three years, NACS put an emphasis on giving retailers the tools to grow better-for-you sales and to determine if this is a category that will work for them because there are some stores, whether it’s the company offer or location, where it doesn’t work.” But what does “healthy” or “better-for-you” actually mean to consumers? As part of its survey this year, IFIC asked participants this question and found that one-third of the population is more concerned about what is not in their food, rather than what is. The next largest group is looking for beneficial ingredients in their food. “We asked the open-ended question and the top theme that came back had to do with what the food doesn’t contain, such as low in sugar, low in fat, low in salt, or low in calories,” said Sanders. “The second biggest theme was that it contained beneficial food components like protein, whole grains, antioxidants and Omega-3s.” This same split also showed up in a recent survey done by General Mills Convenience & Foodservice, which specifically examined convenience store shoppers. Not only did the research reveal that women are more likely to express strong interest in better-for-you items in c-stores (31 percent compared to 23 percent of men), but also the top definitions of better-foryou included what was or was not in the product. For example, the top descriptor was “is fresh,” followed by “is heart healthy,” “is reduced/low/ no fat,” “baked not fried,” “made with whole grains,” “less processing,” “reduced/low/no calorie” and “reduced/low/no sugar.” High in fiber and high in protein also made the list, according to Rachel Pruitt, global consumer insights manager at General Mills. “Consumers’ demand for healthier snacks is not a new trend; however, consumers’ definition or perception of what healthier means has changed,” Pruitt shared. “In the past, healthier often meant low calorie or low in carbs. Today, healthier is more likely to be defined as fresh or less processed. What consumers are looking for

Help grow your sales with a variety of packaging and ﬂavors for a wide range of consumers. • Average candy margin reported in convenience stores: 47.7%1 • 54% of consumers prefer to keep a variety of package types on hand2 • Proven brands with 24 consecutive quarters averaging double digit growth3

when it comes to health varies by context and channel as well.” The bottom line is: There are no official definitions of what is healthy. So, c-store retailers need to utilize the healthy items they are already carrying, and try new items to see what resonates with customers, according to NACS’ Lenard. Water is considered a healthy beverage and c-stores sell half of the immediate-consumption water in the country by the bottle, so this is an area to highlight, he pointed out. “You have to appear honest and genuine with your customers. It doesn’t have to be that you are saying something is good for you, but you can present it in an area that may have other items like it,” explained Lenard. “Look at other beverages besides water, such as 100-percent juice less than 8 ounces, or even milk. Pair these up with some better-for-you items found in a grab-and-go case in the store.” ITEMS CONSIDERED HEALTHY

Sandwiches, salads, sliced apples and whole produce often fall into the better-for-you category as long as they don’t have added salts or sugars. Protein drinks, jerky, health bars and energy bars fall into this segment, too, when positioned properly, said Lenard. He continues to see more c-stores get creative and try new things. One example: Flory’s, a c-store in Fishkill, N.Y., which is part of a three-store chain, offers packaged kale chips above a grab-and-go cooler. The owner told him sales have been very good. “Find your niche and something you can do that is packaged and won’t go bad by Friday,” he said. “Breakfast is an interesting opportunity for us because that is when most people feel aspirational toward health. As the day goes on, a cheeseburger and beer sound good. But in the morning, we [c-stores] have a variety of things people want that they can’t get at a fast-food place, such as yogurt, boiled eggs, string cheese and protein shakes.” When it comes to fruit and vegetables, the most popular categories in the c-store segment fall under: whole fruit, such as bananas, apples and oranges; and fresh-cut (pre-sliced and packaged) fruit and vegetables, according to Kristen Stevens, chief operating officer of the Produce for Better Health Foundation, based in Hockessin, Del. “Consumers can easily find a variety of 100-percent fruit and vegetable juices, canned fruit and vegetables,

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

whole fruit, made-to-order salads and sandwiches loaded with vegetables, and pre-sliced and packaged fruit and vegetables, such as sliced apples, carrot and celery sticks, and sliced melon,” said Stevens. “Some c-stores are beginning to feature and sell more frozen fruit and vegetables as well.” The fruit and vegetable industry is able to supply these types and forms to c-stores now, and it offers a solution for what consumers are demanding, which is healthy, great-tasting food that can be easily and quickly eaten at a fair price, she added. The packaged healthy category in convenience stores largely encompasses alternative snacks. This includes bars, jerky and pretzels (if baked), according to Lenard. And within the growing category of foodservice in c-stores, offering smoothies or protein shakes is another growing segment — and a good way to minimize shrink. “Bananas may not look good with brown spots on them, but they taste great and can be used in smoothies; although often these have to be pre-made because the smoothie bar can take longer than breakfast food,” he shared. “Wegmans does this and sticks a straw in it so customers don’t have to worry about finding a straw. It’s the same thing with a fruit cup offering a fork in the lid. We are convenience stores, and convenience means never having a customer say ‘no’ because something is too much of a hassle.” MANUFACTURERS RESPOND

Consumer packaged goods (CPG) manufacturers are answering shopper demand for healthier products, too, with many new options entering the market each month, especially in on-the-go bars. General Mills Convenience offers a variety of healthy grab-and-go products, including Yoplait yogurt and Nature Valley granola bars, and the company recently rolled out two new products — Nature Valley Biscuits with Creamy Nut Butter and Nature Valley Granola Cups. Both new items respond to the higher

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protein and fiber segment of healthier items, and have no artificial flavors or colors. Supplier KIND also continues to innovate with limited-edition bars low in sugar and high in protein and fiber. The company introduced Caramel Almond Pumpkin Spice for Halloween, followed by Dark Chocolate Hazelnut Spice for the holidays. The brand also launched its first-ever fruit bar in August, made with only fruit and chia or fruit and vegetables. Each flavor has only five ingredients or less. Another CPG company, Kashi, introduced a line of GOLEAN bars, packaged in clear wrappers so consumers can see the whole nuts and seeds in the bars, which are also high in fiber and protein. And The Hershey Co. continues to expand its Brookside portfolio, with the most recent addition being Brookside Yogurt Flavored Fruit and Nut Bars. Beverage makers are answering the call as well. Some newer options include Rubicon Exotic Juice’s line of no-sugar-added juice drinks, featuring 100-percent juice in six flavors, and Gatorade’s G Organic line of sports drinks made from just seven ingredients. There is even protein-infused water available from Trimino, offering seven grams of whey protein, no sugar, carbs or caffeine, at just 28 calories per serving. Foodservice manufacturers are likewise stepping up their game to offer healthier options for retailer’s made-to-order menus. One example is Brakebush Brothers Inc.’s natural chicken breast and diced natural chicken, made from chicken that’s fed an all-vegetarian diet and raised without antibiotics. Convenience distributor Eby-Brown Co. LLC recently rebranded its proprietary Wakefield foodservice line to include a variety of products for consumers wanting healthier options, including fresh parfaits and heart-healthy sandwiches such as an egg white frittata and wraps. “As our research has indicated, we will continue to add healthier choices for our c-store customers to keep ahead of the market trends and, as always, make our offerings with the freshest and finest ingredients as we enhance the options to our food line,” Thomas Wake, co-president of Eby-Brown, said in a press release. PRODUCT PRESENTATION

While stocking healthy products is the first step, marketing them and presenting them in a way that attracts customers and lets them know you offer such options is key. When it comes to produce, an open floor stand or counter display by the register featuring whole fruit

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

New York convenience store Flory’s has had success selling kale chips. The retailer merchandises them above a grab-and-go cooler.

can highlight the offering, according to Stevens of the Produce for Better Health Foundation. The same can be said for a refrigerated case featuring pre-made salads and pre-sliced fruit and vegetables placed near the front of the store. Creating colorful signage to draw customers’ attention to the fruits and vegetables offered is another option, along with celebrating National Nutrition Month in March and Fruits and Veggies — More Matters Month in September. The events can remind and educate customers about the importance of these items, Stevens suggested. “C-stores can also place ads and messages about eating healthy in apps and on their websites, along with clings on the entrance/exit doors and by the gas pumps,” she advised. “The ads/messages should focus on either educating or reminding customers to eat their fruit and veggies. Most consumers process ads and promotional messages through the senses of light and sound.” When marketing healthier offerings, terms such as fresh, low-fat, whole grains and protein are motivating for c-store customers, said Pruitt of General Mills. The company is seeing many c-stores create betterfor-you section endcaps near the front of the store to capture impulse sales, added Kelly Fulford, senior category development manager for General Mills Convenience & Foodservice. “Since most customers spend the majority of their time shopping in line, and this also has the greatest conversion ratio, we recommend grouping better-foryou items together by category (salty, bars, etc.), and leveraging signage to make these items more visible on the shelf,” Fulford noted. Additionally, Cornell University is working with NACS to test different marketing ideas in the convenience channel when it comes to healthy options. So far, they’ve found using stickers to communicate around water increases sales by double digits. CSN

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The Forecourt of the Future Wawa leads the way when it comes to thinking outside the rectangle By Melissa Kress

tatistics show roughly 80 percent of the gas sold in the United States is sold at convenience stores. Yet, despite this staggering figure, retailers continue to focus predominantly on their in-store offerings and too often overlook the forecourt. Wawa Inc., however, is turning a closer eye to its fuel offering, 20 years after adding the product to its c-store operations. As sales of liquid fuel dip — not unlike other categories — the Pennsylvania-based chain is now asking how it can still attain those customers, according to Scott Boorse, facilities senior external vendor manager for Wawa. One solution: placing a greater emphasis on fore-

court design. “Ultimately, you want to have an inviting destination,” Boorse noted, explaining that the design needs to announce your offer and drive customer enthusiasm.

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

He laid out several key aspects retailers should consider when designing their fuel island: • Make it fresh and friendly. • Add a customer service element. • Satisfy customer cravings. The goal is to get customers to the forecourt and inside the store. “You can have a great forecourt offering, but if you don’t have the things inside the store [they want], they will come and fill up once or twice but eventually go somewhere else,” Boorse cautioned. Other “must” elements on the forecourt are a good egress and ingress, a proper traffic flow, a recognizable canopy, proper lighting, and a safe environment. Retailers also need to design their fuel islands with an eye toward the future, so they are able to quickly adapt to changes in the market and customer needs, according to the Wawa exec. THE VIEW FROM 20,000 FEET ABOVE

MoseleyBona Retail President Joe Bona advises operators to look at their forecourt from 20,000 feet

above and “reimagine” the forecourt experience. MoseleyBona Retail specializes in integrating the science of retail with the art of design for the food and beverage and convenience retail industries. “You really want people to drive past your competitors and make your place a destination,” Bona said, pointing out that motor fuel is one of the few things customers buy on faith. Based on this fact, convenience store retailers need to find ways to assure customers of what they are buying. Bona encourages channel players to keep three main principles in mind: • Brand visibility — The one kilometer rule: From what distance can the brand be seen? • Brand perception — How does the design influence customers? • Brand experience — How can you turn transactional activity into a destination? Wawa has led the way with these principles and “owned the canopy,” making it an in integral part of its brand. Others have since followed, Bona said. CSN

WWW.CSNEWS.COM | DECEMBER 2016 | Convenience Store News 45

FOODSERVICE Prepared Food + Hot, Cold, Frozen Dispensed Beverages

HOW TO

How to Keep Your Foodservice Operations Clean & Safe By Bob Phillips

“B

CALL TO ACTION: Foodservice 101

• Schedule regular restroom cleanings and frequent quality checks throughout the day. • Make sure your restroom floors and counters are clean. Even though they may be technically sanitary, full or overflowing trash baskets paint a different picture for customers. • Always keep extra toilet tissue on hand to ensure you never run out of this important item.

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

est practices” has evolved into an amorphous term, usually associated with the guidelines and processes that distinguish the cream of the crop from the average. In many ways, the descriptor has been overused to the point that it has essentially lost all meaning. However, in the convenience foodservice sector, that is anything but the case. It is imperative for convenience store operators to understand and maintain a standard code of best practices to effectively communicate to their customers the cleanliness, quality and safety of the foods and beverages sold at their stores. And make no mistake: While it is certainly important to keep your foodservice areas clean — including the coffee bar and dispensed beverage dispensers — perception of the overall store cleanliness begins in the restrooms. “When a guest visits a restroom and sees disorder and disarray, he or she will immediately wonder what the handling of the food is like in the kitchen,” observed Convenience Store News How To Crew panelist Nancy Caldarola, PhD, RD, a management dietician with Roswell, Ga.-based Food Training Group and director of hospitality, restaurant and tourism management at Gwinnett Technical College in Lawrenceville, Ga. “Guests have a higher level of expectation about cleanliness from food sellers.” Fellow How To Crew member Tom Cook, principal of Westport, Conn.-based King-Casey, a restaurant, foodservice and retail consulting, branding and design firm, agrees with the observation, and pointed to a proprietary study conducted by King-Casey. (The study applied to

FOODSERVICE Prepared Food + Hot, Cold, Frozen Dispensed Beverages

quick-service restaurants, but the principles addressed apply to any venue offering food and beverages for immediate consumption.) “The results were so powerful, we called it the ‘Forgotten Bathroom Zone,’” said Cook. “Women — especially mothers with children — were the most vocal” in this area. For a c-store operator to successfully entice women to enter the store, keeping the restroom facilities clean must be a top priority. “There has been extensive consumer research that indicates a direct correlation between clean restrooms and the perception of the food offer — women in particular,” echoed Joe Bona, How To Crew expert and president of Franklin, Mass.-based consultancy MoseleyBona Retail. “Even if the food is well presented, professionally managed and executed, if the restrooms are dirty and disgusting, then the food is dirty and disgusting. It’s how food establishments get judged.” THE RIGHT STUFF

To effectively keep your store clean from top to bottom — restrooms, to throughout the store, to the parking and fueling areas — it is imperative to have the right cleaning and sanitation products at hand for the various jobs that need to be done each and every day. “I would recommend against using discount cleaning supplies,” said How To Crew retailer Chad Prast, Murphy USA Inc.’s senior category manager of fresh foods and dispensed beverages.

Tips for an Always-Clean Restroom • Establish a cleaning routine, with a checklist posted where customers can see it. • Anticipate peak restroom use times and schedule more frequent cleaning sessions then. • Identify problem areas and determine solutions, such as paper towels on the floor due to the lack of a waste container by the door. • Use secret “customers” to check your cleaning plan. • Select environmentally responsible, fresh-smelling cleaning products and use as directed. • Install hygienic dispensing solutions for paper towels, toilet tissue and soap that control consumption and require less frequent refills. Source: Tork USA

48 Convenience Store News | DECEMBER 2016 | WWW.CSNEWS.COM

CALL TO ACTION: Foodservice 201

• Cross-contamination and hand sanitation are the two most critical areas where proper procedures need to be followed to ensure food safety. • Make all supervisors, district managers and store managers take a food safety course. • Since most county health tests are subpar, develop your own in-house test and post the results online. Your test should be geared to the products available in your foodservice operation (subs, burgers, pizza, etc.).

It is extremely difficult to arrive at the correct ratios using discount/club store supplies, he explained, and that can lead to a dangerous situation if not properly mixed. Instead, he recommends using a system that automatically measures the proper amount of soap, cleaner, sanitizer, etc. “It takes all the guesswork out for the employees and managers,” Prast continued. Of course, the biggest factor in the “pro” column for using discounted sanitation products is cost. “But even that might not save money because employees often over-pour and use more than the recommended amount,” the retailer executive explained. “Most employees think the more you use, the better it will clean. But that’s just not the reality.” Unless you’re a “jan/san chemical expert,” which most c-store operators are not, How To Crew member Mathew Mandeltort, vice president of foodservice strategy at convenience distributor Eby-Brown Co. LLC, said “it would behoove you to consult with folks that know what products can and can’t do, and which products you should or should not use.” As with everything in the kitchen, he added, there is always a right tool for the job. PERCEPTION IS REALITY

Beyond the restrooms, the overall cleanliness of the convenience store — including, of course, your foodservice operation — has a direct correlation on how customers perceive your store and whether or not they will purchase food items therein. “While food has always been a ‘hot-button’ topic, I’m convinced that it filters into all other aspects of the c-store footprint and image,” said How To Crew retailer Ryan Krebs, director of foodservice at York, Pa.-based Rutter’s Farm Stores. “Cleanliness is the perception that convinces customers to buy food in the first place.” That perception begins from the moment a customer

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drives into the parking lot, and is followed by his or her overall in-store experience. “Is there trash on the lot? Is there dust on the retail shelves?” asked Krebs. “If all areas visible to the customer are in good, clean order, you have at least on the surface successfully communicated to your customers that your food program aligns with cleanliness,

CALL TO ACTION: Foodservice 301

• Single-use gloves help keep food safe by creating a barrier between hands and food. • Never use gloves in place of hand washing, though. Hands must be washed before putting on gloves and also when changing into a new pair. • Safety is an all-crew responsibility. Your entire team needs to be involved in keeping floors dry, wet signs posted, debris removed, etc.

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A key food-safety area for c-store operators to address is cross-contamination. According to FoodSafety.gov, an estimated 3,000 Americans die from a foodborne illness each year. As a preventive measure, always keep

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food safety and sanitation.” And yet, once this is accomplished, your job is not done. In fact, it has only just begun. “Food safety is paramount to any successful foodservice operation,” continued Krebs. “It begins with education of staff. Are they being trained and certified (and re-certified) on food handling, temperatures and compliance?” Without effective food-safety measures, retailers leave themselves at risk to have a major incident. “One incident with a customer can cause years of sales and profit losses,” noted Prast, pointing to fast-casual Mexican chain Chipotle as a recent example of how a foodborne illness crisis can be extremely difficult to overcome.

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raw meats separated from vegetables. “Preventing cross-contamination of raw goods with cooked ones is imperative to prevent foodborne illness,” stressed How To Crew expert Holly Veale, foodservice product director at convenience distributor McLane Co. Inc. “Washing hands, using different work spaces, washing and sanitizing dishes and utensils are all key in preventing cross-contamination.” Should a foodborne illness be identified in your store, it is essential to get out in front of the problem. “Go into crisis management mode ASAP,” advised Cook of King-Casey. “If you don’t have a good public relations firm, get one that specializes in crisis management. It may be the best investment you ever made.” Above all, make sure that no one in your store communicates with the press. Direct all inquiries to corporate headquarters. “The last thing you want is the store trying to handle an issue that may have been caused somewhere else,” said Prast. “It is a better idea to have an attorney or well-trained corporate associate discuss any matters with the customer. Often, you find out that

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

Our How To Crew David Bishop — Balvor LLC Joseph Bona — MoseleyBona Retail Ed Burcher — Coen Markets Nancy Caldarola — Food Training Group Joseph Chiovera — XS Foodservice & Marketing Tom Cook — King-Casey Jack W. Cushman — CST Brands Inc. Dean Dirks — Dirks & Associates Ryan Krebs — Rutter’s Farm Stores Mathew Mandeltort — Eby-Brown Co. LLC Larry Miller — Miller Management & Consulting Services Tim Powell — Q1 Consulting Chad Prast — Murphy USA Inc. Holly Veale — McLane Co. Inc.

the incident may have been caused the day before and the customer was just now realizing the sickness.” However, if the cause of the problem is determined to have derived at your location, it will take a lot of time and work to gain back the trust of customers. CSN

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Tobacco Goes to the Ballot Box California tax increase heads to the polls and finally wins voter approval By Melissa Kress

n Nov. 8, registered voters across the United States turned out in droves to cast their ballots for the next commander-in-chief. While everyone was watching, waiting and trying to predict the outcome of the race between GOP candidate Donald Trump and Democratic candidate Hillary Clinton, the tobacco industry was keeping an eye on measures in four key states. Once the election dust settled, California emerged as the state that will see the biggest change in tobacco retailing. Voters in the Golden State — by a 62.9-percent to 37.1-percent tally — approved Proposition 56, a ballot measure that raises the state’s cigarette excise tax by $2 per pack. Also known as the California Healthcare, Research and Prevention Tobacco Tax Act of 2016, the proposition places an equivalent tax increase on other tobacco products and electronic cigarettes containing nicotine. A similar tax proposal was defeated in 2012. Tax revenues from the higher levy are expected to range between $1 billion and $1.4 billion annually by 2017-2018, with revenues decreasing slightly in subsequent years, according to an analysis conducted by the Legislative Analyst’s Office and Department of Finance. This outcome was not a surprise to some industry watchers. “While California accounts for over 12 percent of the U.S. adult population, the state accounts for less than 7 percent of cigarette industry volumes, as smoking incidence in California is nearly 400 basis points below the national average,” said Vivien Azer, director and senior research analyst at Cowen and Co. She explained that the state excise tax increase

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

could result in an approximately 40-basis-point drag on industry volumes in 2017, assuming a 25-percent border benefit and an April 1 effective date. According to Bonnie Herzog, managing director of tobacco, beverage and convenience store research at Wells Fargo Securities LLC, this was the third time in the last decade that California voters weighed in on raising taxes on cigarettes — but the first one to pass. Why is this important? There are several reasons: California is the second-largest cigarette consumer state. In addition, Proposition 56 effectively increases the weighted average state excise tax on cigarettes in the U.S. by 17 cents a pack to $1.77, and will drive average cigarette retail prices up by roughly 8 percent to $6.81 per pack, explained Herzog. Also, high prices — partially driven by the tobacco companies taking cigarette list price hikes — could lead to greater volume declines in fiscal year 2017. “Therefore, we anticipate volumes to decelerate greater than our current 3-percent volume decline expectations,” she said. California’s win could likewise trigger copycat

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behavior in other states, Herzog noted, though she added that Wells Fargo Securities does not believe this is a real risk at this time. “Bottom line: We continue to believe the industry will be able to mitigate any elasticity-driven volume declines from tax pressures with pricing power, as it has through past tax cycles,” she said. THE NAYS HAVE IT

Tobacco tax hike proposals did not fare so well in Colorado, Missouri and North Dakota on Election Day 2016. In Colorado, Amendment 72 was rejected by 54 percent of the voters. The measure attempted to increase the state’s excise tax on cigarettes by $1.75 per pack, for a total tax of $2.59 per pack. If approved, it would have also raised the levy on other tobacco products from 40 percent to 60 percent of the manufacturer’s price.

states where this type of tax increase has taken place.” Amendment 72 also offered few guarantees that the $315 million in new tax dollars would be spent appropriately, according to the Smoker Friendly executive. Facing a similar fate was a proposed initiative to raise the state excise tax in North Dakota. Officially known as Initiated Statutory Measure 4, the proposal set out to increase the tax on cigarettes from 44 cents per pack to $2.20 per pack. The tax on other tobacco products, including liquid nicotine, would have gone from 28 percent to 56 percent of the wholesale purchase price. With the measure defeated, North Dakota’s tax will now remain at 44 cents for a pack of cigarettes and 28 percent of the wholesale purchase price for other tobacco products. In Missouri, a ballot initiative to generate new revenue from increased tobacco taxes — two versions of the ballot initiative, to be exact — also failed during this year’s election. Voters rejected Amendment 3, which would have increased the cigarette tax by 60 cents per pack. It would have been phased in through 2020, and created a 67-cent-per-pack “equity” fee increasing annually for inflation on certain off-brand cigarettes. Missouri voters turned down Proposition A, too, which would have gradually hiked the tax by an additional 23 cents per pack by 2021. This measure would have taxed non-cigarette tobacco products by 5 percent of the manufacturer’s invoice price, paid by the seller. If both measures had passed, the one receiving the most votes would have been implemented. THE NEXT ‘LEGAL’ FRONT

At least one retailer with a significant presence in Colorado spoke out against Amendment 72 in the days leading up to the election. In an op-ed piece in a local newspaper, Mary Szarmach, vice president of trade marketing and government relations and a coowner of Smoker Friendly International, called the tax “disastrous for our business.” Smoker Friendly is a Boulder, Colo.-based family business that operates 102 gas, tobacco and convenience stores. “The last time we weathered a tax increase of this magnitude, we had to close 19 percent of our stores and lay off over 70 hard-working employees,” Szarmach explained. “Tax increases such as these also make for a less safe work environment. Break-ins and armed robberies have grown between 10 and 20 percent in other

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

While state tobacco tax hikes are an old, common theme every time Election Day rolls around, a new theme that gained traction this year was legalized marijuana. Voters in five states were asked to pull the lever on proposals to legalize recreational marijuana. As of press time, the measures were approved in three states: California, Massachusetts and Nevada. Voters rejected the issue in Arizona. Meanwhile in Maine, the votes were still being counted as of press time — with the yays carrying a slight majority (50.2 percent vs. 49.8 percent). “It looks as though the number of states with legalized recreational cannabis doubled to eight after [the Nov. 8] election. What is more, the percent of Americans living in a state with legal recreational cannabis increased nearly four times to over 20 percent,” Cowen and Co.’s Azer said. CSN

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Smartening Up More c-store operators are using technology to capitalize on consumers’ smartphone use By Brian Berk

ore than nine of every 10 Americans now own a cellphone and, even more importantly, 86 percent of them rarely or never turn their phones off, according to a Pew Research study. Hence, it’s safe to assume that the majority of existing and potential convenience store shoppers are looking at their phones throughout much of the day, whether they need to or not. To capitalize on this trend, more convenience store operators are adopting mobile-centric technologies to connect, engage and market to consumers where they are — the goal being to drive more traffic to their stores and ultimately boost sales and profits. The Convenience Store News 2016 Technology

Spending on Technology/Automation After a banner year of spending in 2014, convenience store chain retailers tightened their purse strings a bit in 2015, returning to levels more on par with 2013. While nearly 94 percent of respondents said they spent on technology last year, the average spent per company declined by $423,000 to $1.45 million, while the median spent per company dropped by $45,500 to $280,000. 2015

Spent Did not spend Average spent per company Median spent per company

93.6% 6.4% $1,453,300 $280,000

2014

96% 4% $1,876,380 $325,500

Source: Convenience Store News Market Research, 2016

Technology Investments

Better management of store-level inventory/revenue is the No. 1 area c-store chain retailers expected to spend their technology budgets on this year. This is a change from the previous year, when reducing theft/shrink was the top priority. CURRENT

Better management of store-level inventory/revenue Replace aging POS technology Reduce theft/shrink Better management of store labor expense Speed customer checkout process Increase customer payment options Social media Becoming EMV compliant at the POS Employee training Increase reliability/capacity of bandwidth for data communication Becoming EMV compliant at the pump Integration of systems Provide store manager with decision tools Implement business intelligence, reporting Improve HQ accounting systems Source: Convenience Store News Market Research, 2016

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

YEAR AGO

55.1% 50.9% 43.5% 39.4% 39.0% 36.8% 35.4% 32.4% 31.4%

45.4% 42.9% 45.8% 37.6% 25.0% 38.3% 35.2% n/a 33.4%

27.6% 23.5% 20.2% 18.5% 17.6% 16.4%

37.5% n/a 16.8% 25.3% 17.7% 15.2%

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Study found that nearly half of chain c-stores (47 percent) now offer a mobile app, a solid 8 percentagepoint increase compared to last year, and a robust 18 percentage-point increase compared to two years ago. In 2014, just 29 percent of c-store operators indicated they were offering a mobile app.

Another way chain c-store retailers are attempting to draw shoppers to their stores is via social media. Of particular interest in this yearâ&#x20AC;&#x2122;s study is an apparent shift in the social media networks c-store operators are using to promote their wares. Not surprisingly, Facebook is still No. 1, with nearly all chain retailers

Loyalty Programs After a long period of growth, the number of c-store chain operators offering a loyalty program leveled off this year, declining by one percentage point to 61.2 percent. The research shows fewer point/reward-based programs are being offered; however, the introduction of loyalty programs with credit card or other payment options is on the rise. YEAR AGO

CURRENT

DOES YOUR COMPANY OFFER A LOYALTY PROGRAM? Yes

Promotional/ Sales Technology (percent of chains using each)

Ninety-two percent of those surveyed are investing in promotional/sales technology, with video monitors being the big winner. Text messaging to customers and merchandise ordering at the pump also exhibited strong year-over-year growth. Any promotional sales/technology (net)

CURRENT

YEAR AGO

91.9%

88.2%

59.1% 58.3% 47.2% 45.0% 40.0% 39.4% 36.1%

52.9% 47.1% 33.2% 46.5% 23.5% 35.3% 28.7%

40.6% 31.0% 7.5%

33.3% 31.6% 1.9%

IN STORE:

38.8%

61.2%

37.6%

62.4%

AT PUMP:

DESCRIPTION OF LOYALTY PROGRAM Point/reward-based

Credit card/payment option

5.9%

Both

16.7%

22.8% 71.3%

22.4%

83.3%

Tied to a major oil brand

42.8%

34.9%

Video monitors Advertising/couponing Merchandise ordering Source: Convenience Store News Market Research, 2016

TYPE OF LOYALTY PROGRAM Proprietary

Social media Video monitors Mobile apps Automated loyalty programs GPS/geolocation Text messaging to customers Email marketing

33.3%

Both

33.3%

Source: Convenience Store News Market Research, 2016

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

Social Media

(percent of chains using)

Facebook continues to be the mostly widely used social media channel among c-store operators, followed by Twitter. Other social media sites to see a boost in usage by industry players are Instagram, Pinterest, Google Plus, and Tumblr. Facebook Twitter Instagram Foursquare Pinterest Google Plus Tumblr Base: Respondents who use social media in marketing plans Source: Convenience Store News Market Research, 2016

CURRENT

YEAR AGO

98.6% 68.7% 34.5% 19.1% 12.2% 6.0% 5.9%

97.1% 70.9% 14.5% 29.2% 6.2% 3.0% 2.8%

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Mobile Apps

EMV Compliance

Nearly one half of c-store chain retailers now offer a mobile app. This number continues to rise significantly year over year, increasing by 8 percentage points compared to 2015 and by 18 percentage points vs. 2014. Aside from store location services, fuel prices and coupons are the most popular features of these apps.

Despite the EMV liability shift deadline at the point-of-sale (POS) passing more than one year ago, only 40 percent of c-store chains are currently EMV compliant. The remaining 60 percent said they have at least begun the process. At the pump, where the liability shift deadline will take place Oct. 1, 2017, about one-third of c-store retailers are compliant already.

DOES YOUR COMPANY HAVE A MOBILE APP FOR CONSUMERS?

47.2%

CURRENT

52.8%

S YE

38.9%

IS YOUR COMPANY EMV COMPLIANT? Yes

AT POS

YEAR AGO

61.1%

S YE

60%

40%

AT PUMP

65%

35%

Source: Convenience Store News Market Research, 2016

(98.6 percent) using this avenue. However, Instagram saw the biggest year-over-year jump and is now used by approximately one-third of c-store chains. EMV INVESTMENTS

EMV has grabbed the attention of many c-store operators and continues to garner headlines. Although not a requirement, credit card purveyors recommended all retailers upgrade their point-of-sale (POS) equipment to be compliant with EMV — an acronym for Europay, MasterCard and Visa, the three companies that originally created the security standard — by Oct. 1, 2015 to avoid being held financially responsible for potential fraud. Two in every five c-store operators are currently EMV compliant at the POS, according to this year’s Technology Study findings. In addition, one-third of respondents indicated they plan to invest to become EMV compliant at the POS within the next year. C-store chain retailers now face another looming liability shift deadline on Oct. 1, 2017, when they are recommended to make EMV upgrades on the forecourt. Thirty-five percent of respondents say they have

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

No, but we have started the process

Source: Convenience Store News Market Research, 2016

already made the necessary upgrades to their automated fuel dispensers. And nearly one-quarter of those surveyed (23.5 percent) intend to spend to upgrade their fuel dispensers to become EMV compliant within the next year. GETTING PUMPED

One other key takeaway from this year’s CSNews Technology Study is that the use of technology is becoming more and more prevalent at the fuel pump. Although still small in number, at-pump merchandise ordering took a more than threefold leap in just the past year. More than 7 percent of survey respondents now offer this service, compared to just 2 percent a year ago. Installation of video monitors at the pump, providing entertainment and marketing opportunities, also saw a healthy rise year over year, increasing from 33 percent in 2015 to 40 percent this year. C-store chain operators are placing an emphasis on rolling out pay-at-the-pump technology, too. Ninetyfour percent of those surveyed now offer this service, vs. 89 percent one year ago. CSN

$GGUHVV ( 3ODQR 3.:< 67( 3ODQR 7; 7ROO )UHH 2UGHU )D[

STORESPOTLIGHT CornerStone Market

Its Own Little Corner of the World CornerStone Market brings Little Oil Co. back to c-store operations after 20 years By Danielle Romano

ornerStone Market LLC was three years in the making. It was during the 95th anniversary celebration of Little Oil Co. Inc. that owner Stratford Ward decided it was time for a new convenience store, seeing as the company hadn’t operated or opened one in 20 years. A family business, Richmond, Va.-based Little Oil Co. was founded in 1921 by Ward’s grandfather. The company distributes motor fuels to convenience stores, service stations and commercial customers throughout Virginia, Maryland and North Carolina.

its grand opening on Oct. 6. Located at 501 W. Atlantic St. in Emporia and sitting on a 1-acre lot, the 5,000-square-foot store is unique in a number of ways. The first way is that CornerStone Market features a 1,082-square-foot Subway restaurant — the only one of its kind in this community of 15,000 people. CornerStone Subway LLC is owned by Ward and Jill Slate. The second way is with its BP-branded motor fuel offering, which is the first BP located in the northbound lane of Interstate 95 in the state of Virginia. CornerStone Market is also the first c-store in Virginia made of precast concrete. This construction type is quicker to install, sturdier and less expensive than normal types, according to Barry Gizzard, sales manager for Little Oil Co., who came up with the store’s name. Gizzard thought up the moniker based on the building’s stone exterior and the c-store’s positioning on a street corner. The use of stone is carried through to the store’s entrance columns, beer cave entrance, primary ID sign base, and fountain drink area as well. SWEET SURPRISES IN-STORE

CornerStone Market celebrated its grand opening in early October.

Alongside the owners of home and commercial building contracting company Slate and Spivey — Clint Slate, Chris Slate and Billy Slate, who together are a 50-percent partner in CornerStone Market — Ward and Little Oil Co. set out to bring a new c-store and Subway restaurant to Emporia, Va. With the goal of taking a fresh approach to the c-store business, CornerStone Market celebrated

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

Open 24 hours a day, seven days a week, CornerStone Market is a foodservice- and beverage-centric convenience store. In addition to the Subway restaurant, customers can find an array of hot and freshly prepared Hunt Brothers Pizza menu items to choose from, from slices of pizza to whole pies, to wings and WingBites, and cheese breadsticks. The store also has an accompanying roller grill station, which features a Hillshire Farms hot dog program, complete with four types of hots dogs and breakfast sausages. On the sweeter side, a Southern Sweets fresh doughnut program, Flavor Burst soft-serve ice cream offering, and Razzle milkshake program are

STORESPOTLIGHT CornerStone Market

Twelve LED televisions positioned throughout CornerStone Market provide abundant marketing opportunities.

CornerStone Market’s “secret weapon” in setting itself apart from the traditional convenience foodservice offerings, according to Terry Johnson, CornerStone Market’s retail designer. “Our doughnut program is our biggest surprise at the store. We bring in the product frozen, then we proof, heat and ice each doughnut in-house for the best freshness available,” he told Convenience Store News. Fresh doughnuts are made every four hours. For beverage-seeking customers, CornerStone Market features a hot coffee program, which was designed in partnership with S&D Coffee Inc. Four coffee blends can be customized with an array of flavor shots and specialty toppings. On the cold and frozen dispensed beverage side, the store has a 16-head fountain dispenser with flavor shots, as well as a Caribbean Crème frozen beverage unit offering four flavors. Some additional amenities of CornerStone Market are: • A beer cave that’s always set to 28 degrees; • A craft beer section that allows customers to create their own six-packs; • A cold case stocked with fresh fruit, sandwiches and beverages; • Touchless, airport-style restrooms; • Virginia Lottery; • An ATM machine; • 45 parking spots; and • 48-inch LED TVs (12 of them) for digital and video advertising.

and local traffic,” he commented. As drivers approach Virginia from North Carolina on the interstate, they will see and recognize the unmistakable BP logo, as it sits high atop a LED price sign and reader board. CornerStone Market has 12 fueling positions for gasoline and four for diesel. All of the dispensers have 10-inch television screens that display daily media provided by Gilbarco and VNet Media, including The Weather Channel, NBC Sports and news, plus store ads. Coinciding with its BP fuel offering, the BP Rewards program is available to CornerStone Market customers. Members receive 50 cents off per gallon for every $100 spent on gas and diesel for 90 days, followed by 10 cents off per gallon on an ongoing basis. “This is a great way for our customers to be rewarded and for them to save a lot of money. This is the best program in the oil industry right now,” Gizzard expressed. CornerStone Market BP was just recognized as the No. 1 BP Rewards site in October in Virginia and in the top 10 in the country, he added. The Emporia location is not expected to be a oneoff for Little Oil Co. and Slate and Spivey. The partners believe CornerStone Market is positioned to grow by at least one new store a year. CSN

PRIMED FOR HIGH TRAFFIC

CornerStone Market is well-positioned to attract locals, tourists and professional drivers with its prime Interstate 95 location. According to Gizzard, Emporia serves as the main interchange going north or south on I-95, and marks the halfway point between Maine and Florida. “It is the perfect combination of interstate traffic

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

CornerStone Market is the first BP station located northbound on Interstate 95 in the state of Virginia.

EXPERT’SVIEW

The Leader’s Mission: Bring Other Women With Her Kellogg’s Tracy Joshua offers insights on gender and race in the workplace

omen who want to be senior leaders in retail and consumer goods know the numbers are against them. Women make up more than half of the retail industry’s workforce, but comprise just 22 percent of its global senior management, according a 2015 study by By Joan Toth, Network Grant Thornton. In food and beverage, of Executive Women women do a bit better (27 percent), but both industries lag far behind sectors like hospitality, healthcare and education. For women of color, the numbers are even more discouraging. Black women hold only 1.5 percent of senior-level executive positions in the private sector. Hispanic and Asian women each hold about 1 percent of those roles, according to the U.S. Equal Employment Opportunity Commission. These numbers suggest the challenge. However, they don’t tell the story of the tens of thousands of women and scores of leading companies who are changing the odds and advancing women to senior leadership.

Convenience Store News is pleased to continue this series of exclusive educational columns by the Network of Executive Women (NEW), coinciding with the 2016 CSNews Top Women in Convenience awards this fall. More than 60 female managers, executives and directors who work in the convenience store industry were honored in the thirdannual program. In addition to being a presentation sponsor for the Top Women in Convenience program, NEW and

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

I’m talking about women like Tracy Joshua and companies like Kellogg Co., where more than 40 percent of its board directors are women. CHALLENGES IN THE SUPPLY CHAIN

“Retail and consumer goods has had its challenges [advancing women], particularly in supply chain, where women have traditionally struggled to reach executive positions,” says Joshua, who serves as Kellogg’s vice president for procurement indirect. “But it is a very dynamic and transformational time in our industry, especially for women.” She points to several reasons why she has few female peers and even fewer who are women of color: • Women don’t see growth opportunities or a career path to the top. • The supply chain, in particular, is perceived as more tactical — trucks, warehousing, operations, plants — than strategic in nature. • Supply chain and manufacturing roles are dominated by men and favor male workstyles. “Men are promoted for their potential, while women are

CSNews have partnered to develop this series of columns directed at helping corporate leaders drive more inclusive company cultures. Sponsored by:

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EXPERT’SVIEW

promoted on demonstrated results.” • Mentoring and sponsorship from the senior executive leadership team is often missing. • Senior roles often lack work/life flexibility. • Gender and racial stereotypes are stubborn. “My personal career barriers have become headwinds when the culture of an organization has inhibited or restricted my ability to leverage my experiences, knowledge and perceptions to benefit the company.”

• Give each executive a goal that supports the growth of least five diverse employees on at least two levels within five years. THE KELLOGG WAY

At Kellogg, diversity and inclusion (D&I) is fostered through business resource groups, including Women of Kellogg’s, Women in the Supply Chain, and Women in Procurement. The company also provides D&I training such as GenderSpeak, which promotes communication between men and “Inclusion fosters diversity of thought, effective women; and Unconscious Bias, which offers which drives creativity, which in turn strategies to recognize and mitigate bias and create change in decision-making and interfosters innovation. Creativity and personal and group interactions. innovation are the keys to sustained Joshua serves as a mentor and sponsor to others who want to grow their careers greatness. None of us is as strong as — regardless of gender, race or ethnicity. all of us together.” She participates in Kellogg’s Procurement — Tracy Joshua, Kellogg Co. Diversity and Inclusion Council and in diversity organizations that focus on women and veteran business owners. “My personal goal is to be an agent for change and transformation wherever I go,” she says. HER ADVICE: BE AUTHENTIC She’s been delivering on that goal: In 2015, Joshua Still, Joshua has not felt compelled to “cover” (or and her team spent more than $150 million with downplay) her gender, cultural or racial identity to diverse suppliers. conform to the workplace norms set by predominately “Inclusion fosters diversity of thought, which drives white male execs. She believes she is not able to deliver great results if she’s not able to “have my own voice creativity, which in turn fosters innovation,” Joshua says. “Creativity and innovation are the keys to sustained greatand share my diverse perspective.” She offers this advice for industry leaders who want ness. None of us is as strong as all of us together.” CSN to leverage the benefits of diversity: Joan Toth is president and CEO of the Network of Executive Women, Retail and • Pair executive leaders with women of color. Consumer Goods, a learning and leadership community representing 10,000 • Be intentional with career and succession planning. members, 750 companies, 100 corporate partners and 20 regional groups in • Enroll male executives and other men as change agents. the United States and Canada. Visit newonline.org for more information. • Require annual diversity and inclusion training Editor’s note: The opinions expressed in this column are the author’s and do for all company leaders. not necessarily reflect the views of Convenience Store News.

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

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

HOTPRODUCTS Special Advertising Section

Snacks

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

HOTPRODUCTS Special Advertising Section

Gourmet Pet Treats

Looking for ideas to promote your product or services? Need help creating an ad that fits your needs without spending a fortune with an advertising agency?

We are here to help you, whether it be in the classified ad section, an ad in the main pages, or online. Call or email with any questions or for pricing. We can handle all aspects of your ad from conception to print in a fraction of the cost that agencies charge!

Our ads get results! CALL TERRY KANGANIS TODAY-

201.855.7615

tkanganis@stagnitomedia.com

WWW.CSNEWS.COM | DECEMBER 2016 | Convenience Store News 73

CLASSIFIED Credit Card Processing / Merchant Service

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

CLASSIFIED Credit Card Processing / Merchant Services

WWW.CSNEWS.COM | DECEMBER 2016 | Convenience Store News 75

CLASSIFIED Air Vacs

ATMs

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

CLASSIFIED Petroleum/Equiment

Plastics

General Merchandise

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

CLASSIFIED Pre-Paid/Cellular Products

Age Verifier / POS

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

Age Verifier

CLASSIFIED Services

Plastics

Scales

General Merchandise

DAVY CROCKETT HATS SELL BY THE TENS OF THOUSANDS AT $5.00 EACH. Silver Fox tails are a good seller!

You Can Scan We have: Red Fox tails, Coyote tails, White tails, Racoon tails, etc.

Leopard Rabbit Skin

Rabbit Skins come in White and Ivory for $2.00 and Leopard for $8.00

LARGEST FUR TAIL DEALER WITH OVER A MILLION TAILS AT LOW WHOLESALE ONLY PRICES. $100 MIN. FREE PRICE LIST.

Strips Inc. Tel.: (718) 786-3381 Fax: (718) 786-0203 http://stripsinc.tripod.com

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

CLASSIFIED Financial Services

Check Guarantee Services

Equipment / Supplies

Wholesale Refrigeration

of retailers

who read Convenience Store News do so because they want to find out about new products. Reach those important hard to reach retailers by advertising here in the Hot Products Section of Convenience Store News by contacting:

Terry Kanganis at Stagnito Media at 201-855-7615 for more details. 80 Convenience Store News | DECEMBER 2016 | WWW.CSNEWS.COM

ADINDEX Altria Group Distribution Company ................................. 2-3,31,69 American Coalition for Ethanol........................................ 45 BIC........................................................................................ 5

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

Blu Cigs ............................................................................... 21 Campbell’s .......................................................................... 84 Cash Depot.......................................................................... 44 Cookies United ................................................................... 50

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

Fantasy Farms..................................................................... 20 Forte Products..................................................................... 16 GSK Group .......................................................................... 83 Imageworks Tobacco Displays ......................................... 65 Iowa Rotocast ..................................................................... 13 Jack Link’s........................................................................... 18B Regional JTM/JJs Bakery................................................................... 47 Kretek .................................................................................. 55 KT&G.................................................................................... 61,63 Liggett Vector Brands ........................................................ 17 Logic Technologies ............................................................ CV1,10-11,29 Mars Chocolate NA............................................................. 23 McLane Company............................................................... 15

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

Mondelez International..................................................... 39 NAFEM................................................................................. 59 Nat Sherman....................................................................... 57 Organic Valley .................................................................... 51 Poppies International ........................................................ 52 RJ Reynolds Tobacco Company ....................................... 9,25,33 Save-A-Lot.......................................................................... 7 Tillamook Country Smoker, Inc........................................ 49 Tyson ................................................................................... 36-37 Universal Merchant Services............................................ Outsert

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 Dian Melius Western Regional Sales Manager 949-387-1451 dmelius@ensembleiq.com Roz Gilman Ad Manager 314-403-4753 rgilman@ensembleiq.com

EnsembleIQ U.S. brands:

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

GETTINGTOTHECORE Do you currently own an electric or hybrid car?

Open to Alternatives?

YES

New research delves into consumers’ feelings on environmentally friendly fuels

7.2%

ndustry insiders have long maintained that education is a crucial part of getting consumers to purchase alternative fuels vs. traditional gasoline. But new research shows that even more education is needed. Carbonview Research, sister company of Convenience Store News, recently surveyed 511 U.S. consumers who own a car about their fuel purchasing habits and only about one in 10 said they are extremely or very familiar with alternative fuels.

How likely are you to own an electric or hybrid car in the next five years? Base: 511 respondents who own a car and have purchased motor fuel in the past month

Base Extremely Very Somewhat Not very Not at all

AGE: 18-24

511 5.7% 8.2 40.7 36.0 9.4

63 11.1% 11.1 47.6 23.8 6.3

92.8% 10.0%

Extremely

14.5%

Very

36.8%

Somewhat

26.0%

Not very

12.7%

Not at all

One-quarter of motorists see an electric or hybrid car as extremely or very likely in their future.

How familiar are you with alternative fuels? TOTAL

Younger motorists, particularly between the ages of 18 and 24, have the most familiarity with alternative fuels.

25-34

35-44

45-54

55-64

65+

131 7.6% 9.9 40.5 33.6 8.4

107 3.7% 9.3 44.9 31.8 10.3

105 5.7% 5.7 40.0 36.2 12.4

74 2.7% 8.1 37.8 47.3 4.1

31 0.0% 0.0 22.6 58.1 19.4

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

Have you ever purchased any of the following types of alternative fuels? TOTAL

Base Have purchased alternative fuels (net) E15 E85 Other ethanol blends Regular diesel Biodiesel Compressed natural gas I have not purchased alternative fuels before

PURCHASE FUEL AT: GAS STATION

CONVENIENCE STORE W/ GAS STATION

432 29.4% 3.9 12.3 8.6 11.6 2.5 2.3 70.6%

369 28.7% 4.3 13.6 9.5 9.5 2.7 2.2 71.3%

511 29.7% 4.5 12.1 8.6 11.5 2.9 2.3 70.3%

HIGHWAY TRUCK STOP

WAREHOUSE CLUB

126 38.1% 6.3 23.0 13.5 14.3 4.8 3.2 61.9%

161 36.6% 8.7 18.6 12.4 9.9 5.6 2.5 63.4%

SUPERMARKET

189 34.4% 5.3 15.3 10.6 10.1 3.2 3.7 65.6%

Those who purchase fuel at highway truck stops are the most likely to have purchased an alternative fuel.

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

How likely are you to pay extra to purchase environmentally friendly fuel alternatives? TOTAL

Want to collaborate and share expertise with your peers? The Council of Retail Experts (CORE) is an exclusive network of convenience store retail leaders who do just that. For more information on how to join CORE, please visit www.cvcoreinsights.com.

Survey respondents sourced via ProdegeMR’s quality panel of 19-plus million engaged participants. Visit prodegemr.com for more info. 82 Convenience Store News | DECEMBER 2016 | WWW.CSNEWS.COM

Base Extremely Very Somewhat Not very Not at all

511 4.3% 13.5 39.3 30.1 12.7

MALE

260 4.2% 18.5 34.2 29.2 13.8

FEMALE

251 4.4% 8.4 44.6 31.1 11.6

Paying more for environmentally friendly fuel alternatives is a no-go for more men than women.

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

FAST HEADACHE RELIEF

FOR FAST-PACED SHOPPERS

Use products as directed.

Dispenser and small, convenient packs are back!

Contact your local Excedrin® sales representative on how to order. EMAIL: scott.f.breisinger@gsk.com

Lil’ Drug Store Convenience Valet Navajo Incorporated Select Corporation

Modern Aids Medex Eagle Distributors

no sugaR addEd* • no artiFiciaL coloRs, flAvors or aDded PreseRvativeS VeggiEs foR all™ *not a low-calorie food

INCREASE VOLUME! Huge opportunity exists to drive volume in meat snacks and develop destination-driven strategies.

eat snacks provide sizable ways for retailers to build a destination category that drives volume and profits. With huge upside potential in household penetration, meat snacks have more than enough room to grow. Consumer trends show continued interest in meat snacks attributes with no signs of slowing down. How can you capture that growth potential and build a destination within the walls of your stores?

Identifying Unmet Needs To start, it is imperative to identify and strategize against unmet category needs. Category trends and analysis show that there are several unmet needs in today’s market: • Healthier protein options • New occasions • Portable solutions for on-the-go families

INCREASE VOLUME!

There is a big opportunity to drive explosive growth by meeting these needs across the store and leveraging the versatility of meat snacks. But how do you engage with consumers, meet their needs and drive growth? Master Merchandising Efforts The number-one barrier to meat snack purchase is that consumers didn’t think about the category. To help overcome this, start by surrounding shoppers in-store with multiple merchandising touchpoints. In-line sets, secondary displays and checkout locations all help capture sales for both planned and impulse purchases.

HouseHold Penetration – snacking categories UPSIDE POTENTIAL FOR MEAT SNACKS Chips/Pretzels

97% Cookies/Crackers

88% Nuts/Seeds

64% Meat Snacks

49% interruPt sHoPPers! snack purchases are made outside 56% ofthemeat aisle! of shoppers don’t decide to buy the category

they are inside the store. A quarter said 50% until a display influences a purchase. Source: Jack Link’s Protein Snacks Research, 2015

HoW Meat snack sHoPPers are inFluenced Saw a display and it reminded them to purchase

19% Purchased from the main set

44% Noticed meat snacks right next to check out

32% Source: Jack Link’s Protein Snacks Research, 2015

Generate Interest and Attention To help generate shopper interest in meat snacks, consider: • Creating an in-store disruption to capture impulse sales • Using other high-traffic snack categories as an anchor • Driving awareness with signage and promotion • Merchandising in multiple locations

Source: Nielsen Scan Data xAOC+C, Salty Snacks & Nuts, 52 weeks ending Jan. 23, 2016

closing Penetration gaP WitH nuts/seeds =

$1.8-bILLION OPPORTUNITy!

INCREASE VOLUME!

Q&A STEVE ALTHAUS

VICE PRESIDENT OF SALES, JACK LINK’S PROTEIN SNACKS

There are plenty of opportunities to create a destination category in order to drive volume and profits in the meat snacks category. Shoppers are seeking higher-protein snacks and are very open to making a meat snacks purchase, but they need cues and reminders to get in the consideration set. Converting impulse shoppers to planned ones requires a strategy focused on making meat snacks stand out among snacking options and ensuring meat snacks are available in relevant areas of the store. Steve Althaus, Vice President of Sales at Jack Link’s, shares some insight into how to expand the meat snacks category’s presence, making it top of mind and a destination for a growing population interested in protein-based snacks.

“Meat snack sets must expand their holding power to drive more shopper awareness of the category.” Q: What are the key attributes necessary to make meat snacks a destination category at retail?

There are three attributes that retailers need to focus on to make meat snacks a destination category at retail. First, meat snack sets must expand their holding power to drive more shopper awareness of the category. The category still trails all other salty snack categories in penetration, yet is growing much faster than other salty categories. Secondly, as a high-impulse category, retailers should create a permanent secondary location for meat snacks. Jack Link’s has partnered with many retailers to install state-of-the-art merchandising racks that optimize sales and that simplify the shopping experience. Retailers that are getting more than their fair share of this growth category have meat snacks and Jack Link’s beef jerky placed on the front-end check lanes.

“When we compare meat snacks to other protein snacking categories, the opportunity to grow share of stomach with consumers is incredible.” Finally, it is critical for retailers to promote the category and communicate its better-for-you benefits. Protein is the hottest trend right now, and as we say at Jack Link’s, you can’t out-protein meat. Q: How big is the potential opportunity for retailers committed to building a presence and using innovation to make meat snacks a destination?

As the category leader, it is our obligation to invest in innovation to keep the category healthy and growing. Going back to the protein trend, when we compare meat snacks to other protein snacking categories, the opportunity to grow share of stomach with consumers is incredible. Innovation will also help us grow the category, and we have an exciting pipeline for 2017. The category, in many channels, continues to be under-spaced based on sales. Expanding sets will drive awareness, and it will allow for the innovation to truly deliver incremental growth for the category. Q: How can retailers best partner with Jack Link’s to drive these efforts?

Jack Link’s has many resources to provide our retail partners with deep consumer and shopper insights, and recommendations to accelerate growth in the meat snack category. We’re a relationship-based company and believe the best way to do business is to create meaningful partnerships. This means we work hand-in-hand with our retail partners, via frequent growth summits, to share our category and consumer insights and turn those into customized solutions. This includes making schematic and assortment recommendations, as well as a preview to our innovation plans. Q. What is YOUR favorite variety and occasion for eating meat snacks and why?

As an avid golfer, I never hit the first tee without a couple of bags of jerky in my golf bag. My golfing buddies refer to it as our “birdie bag.” Once someone in our group makes a birdie, the jerky comes out to fuel the round. Spending four to five hours on the course requires a snack, and there is no better way to keep our energy up than with a bag of Jack Link’s Sweet and Hot Beef Jerky!

& E N EATIO F R FISTR OF CE G % EN R RE 2C5ONFE

T O B A C C O • VA P O R • A LT E R N AT I V E

JANUARY 25–26, 2017

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Why Attend TPE 2017? TPE is the world’s largest trade show showcasing the full spectrum of tobacco, vapor, alternative and related merchandise on the market. Over 500 exhibitors will be showcasing everything from premium cigars to the latest in vape products January 25 and 26, 2017, at the Las Vegas Convention Center. Plus, there’s educational sessions on the regulatory environment, new trends, merchandising, leveraging data and much more as well as experiential lounges available for sampling new products and holding product demos.

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INNOVATIVE NEW PRODUCT SHOWCASE

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EXTRA PERKS TO ENJOY

Geared toward growth, these must-attend sessions will educate attendees with strategies to adapt and grow their businesses in a changing market: • Government Regulations & Direction • Impressive Keynote & General Sessions • Hot Topic Session Tracks • Premium Cigars, RYO, & Smokeless Track • The Future of Vapor Track • Marijuana in the Mainstream

Don’t miss these additional opportunities and values at TPE 2017 • New Product Showcase: featuring TPE 2017 premiers • Educational sessions presented by the industry experts at NATO and more • New Online Show Platform: an easy way to schedule meetings, booth visits, sessions, and more • Discounted hotel room rates

EASY WAY TO SHOP • TOBACCO • VAPOR • ALTERNATIVE • GENERAL MERCHANDISE

PLUS...A CHANCE TO WIN BIG! Play your cards right and you could win $3,000 in our Retailer Raffle. Drawing to be held on Thursday at 3pm on the exhibit floor. Winner must be present to claim their prize.

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EDUCATION BY INDUSTRY LEADERS WEDNESDAY, JANUARY 25, 2017

THURSDAY, JANUARY 26, 2017 8:00am–10:00am KEYNOTE SPEAKER & INDUSTRY PANEL

8:00am–10:00am GENERAL SESSION

Celebrity Speaker – “How to Succeed in a Changing Market”

“State of the Industry” –Bonnie Herzog (Wells Fargo Securities) –David Bishop (Balvor, LLC.)

–Terry Gallagher (Smoker Friendly)

“FDA Regulatory Update: Perspectives, Guidance, and Litigation Updates” –Tom Briant (Executive Director, NATO)

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)

“The Future of Vapor”

10:15am–11:30am INDUSTRY TRACKS “Retail Growth and Expansion in a Changing Market” “Increasing Revenues and Profit with a Successful Humidor Program” –Sergio Montolfo (General Manager, Phillips & King)

“Fighting Back! How to Beat Local Legislation on Your Homefront” –Tom Briant (Executive Director, NATO)

–Austin Hopper (Gilla), Jacopo D’Alessandris (President, EAS), Bryan Haynes (Partner, Troutman Sanders Law Firm)

“Marijuana Goes Mainstream: How Adding Cannabis Accessories can Boost Your Bottom Line” –Tyler Goldman (CEO, PAX)

“Tobacco Category: Still the Key to C-Store Profits” –Don Longo (Convenience Store News, Editorial Director)

10:30am–5:00pm SHOW FLOOR OPEN

EARLY-BIRD SPECIAL REGISTER BEFORE

NOV. 15

EARLY BIRD

PRE-REGISTRATION (NOV. 16– JAN. 24)

(JAN. 25– JAN. 26)

Exhibits Only Non-Exhibiting Mfg.

$50 $250

$60 $250

$80 $275

Conference Attendees Conference Exhibitors

$200 FREE

$225 FREE

$250 FREE

(THROUGH NOV. 15)

FREE

ONSITE

PLUS

25 OFF %

REGISTRATION

CONFERENCE

*EXHIBITS ONLY

TOP

R E A S O N S FOR ATTENDING

1. DISCOVER NEW PRODUCTS 2. LEARN RETAIL BEST PRACTICES 3. FIND NEW INDUSTRY SUPPLIERS 4. SAMPLE & COMPARE PRODUCTS TO PURCHASE 5. ATTEND SESSIONS BY INDUSTRY LEADERS

LIST OF EXHIBITORS*

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

TOBACCOPLUSEXPO.COM

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