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

LEVEL UP YOUR FOODSERVICE MARKETING

PLAYING THE LONG GAME Hall of Famer Brian Hannasch’s 40-year career in the industry has led him to head one of the largest convenience and mobility companies in the world.

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EDITOR’S NOTE

Challenging Times Call for Sound Leadership The industry needs skillful and empathetic leaders more than ever HEADING INTO THIS YEAR, half of the convenience channel’s retailers and a majority of the industry’s suppliers and distributors were optimistic about their overall business prospects, according to the findings of the 2022 Convenience Store News Forecast Study.

The past 11 months have certainly challenged that optimism, as the industry contends with continued labor shortages and supply chain issues coupled with the effects of inflation and a potential recession looming (or already here, depending on whom you ask).

Through it all, however, the c-store industry’s retailers, distributors and suppliers have proven themselves to be pros at navigating detours and finding new routes to satisfy consumers’ changing expectations for convenient shopping.

In this issue (see page 34), we spotlight two convenience channel veterans who have been at the forefront in guiding their companies — and the industry at large — through difficult times, and leading the way in innovation and improvement. On Nov. 21, Brian Hannasch, president and CEO of Laval, Quebec-based Alimentation CoucheTard Inc. (ACT), and Brent Cotten, vice president of customer and industry affairs at The Hershey Co., were inducted into the CSNews Hall of Fame.

Since Hannasch took the helm of ACT in September 2014, the company has grown to be one of the largest convenience store groups in the world. During his tenure,

EBITDA has grown by an average of 17 percent per year.

ACT also has expanded the super-local focus of its 29 business units and created global functions in commercial optimization, technology, finance, marketing and human resources as it continues its journey to be the world’s preferred destination for convenience and fuel. Hannasch’s focus is on ACT employees growing together to fulfill the company’s mission of “making our customers’ lives a little easier every day.”

Cotten has been with Hershey for more than 30 years and in his current role, he represents the company in U.S. trade associations and at trade events and customer events.

He recently completed a term as the 2021-2022 chair of the NACS Supplier Board. Cotten spends more than 40 weeks each year on the road, traveling across the country to take part in face-to-face interactions with retailers and the Hershey sales team. A big part of his job is building and nurturing relationships with customers and working to understand their business needs.

I had the honor of emceeing this year’s Hall of Fame gala in Charlotte, N.C., and it was an inspiring event. With the bevy of current issues facing the convenience channel unlikely to subside anytime soon, the industry needs skillful and empathetic leaders more than ever.

Congratulations to our newest Hall of Famers!

For comments, please contact Linda Lisanti, Editor-in-Chief, at llisanti@ensembleiq.com.

EDITORIAL EXCELLENCE AWARDS (2016-2022)

EDITORIAL ADVISORY BOARD

2021 Jesse H. Neal National Business Journalism Award Finalist, Best Infographics, June 2021

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

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

2020 Trade Association Business Publications Intl. Tabbie Awards Honorable Mention, Best Single Issue, September 2019 2016 Trade Association Business Publications Intl. Tabbie Awards Silver, Front Cover Illustration, June 2015

2022 Eddie Award, Folio: magazine Winner, Business to Business, Retail, Single Article, March 2022 Winner, Business to Business, Food & Beverage, Series of Articles, October 2021 Honorable Mention, Business to Business, Retail, Single Article, September 2021 2020 Eddie Award, Folio: magazine Business to Business, Retail, Series of Articles, September 2019 2018 Eddie Award Honorable Mention, Folio: magazine Business to Business, Retail, Website Business to Business, Retail, Full Issue, October 2017 Business to Business, Editorial Use of Data, June 2017 2017 Eddie Award, Folio: magazine Winner, Business to Business, Retail, Single/Series of Articles, May 2017 Honorable Mention, Business to Business, Retail, Single/Series of Articles, June 2016 2016 Eddie Award Honorable Mention, Folio: magazine Business to Business, Retail, Full Issue, October 2015 Business to Business, Retail, Single/Series of Articles, August 2015

Laura Aufleger OnCue Express

Ray Johnson Speedee Mart

Chad Beck Core-Mark

Ruth Ann Lilly GPM Investments LLC

Edward Davidson Ed Davidson & Associates (7-Eleven Inc., retired) Robert Falciani ExtraMile Convenience Stores Jim Hachtel Eby-Brown Co.

Jonathan Polansky Plaid Pantries Inc. Greg Scriver Kwik Trip Inc. Roy Strasburger StrasGlobal

Chris Hartman Rutter’s

DE CE MBE R

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Vito Maurici McLane Co. Inc.

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VIEWPOINT

Pain & Gain What are the pain points convenience store retailers will face in 2023?

AS I LIE here following surgery to repair a torn Achilles tendon, my mind doesn’t stray very far from the leg pain I feel every four to six hours. Which then gets me thinking about a subject raised at a recent Convenience Store News Editorial Advisory Board meeting: What are the pain points convenience store retailers will face in 2023?

At least I have some prescription drugs to deal with my pain, but I wonder how retailers will deal with these pain points in the year ahead:

The new year may bring even more pain points for convenience store retailers to overcome. The prescription, in my view, is to concentrate on providing more value to your customers.

Consumers trading down. “It’s the economy, stupid,” as James Carville said during Bill Clinton’s successful 1992 presidential campaign. That phrase is even more relevant today. Many consumers are hurting. Not all, but certainly the blue-collar consumers that make up the core of the convenience store customer base. Retailers are seeing customers purchasing more generic and private label products, especially in cigarettes.

Unfavorable policies. Government regulation, or over-regulation, touches everything from energy policy to nicotine flavor bans to credit card transaction fees. Anti-petroleum policies that raise fuel prices take money out of consumers’ pockets that they would normally spend in the store. “Credit card transaction fees are my largest single store operating expense,” outgoing NACS Chairman Jared Scheeler said at last month’s convention. ‘Nuff said.

Rising crime. Some retailers can’t keep their stores’ doors open overnight — not because of lack of labor as was the case a year ago, but because of rampant robberies. It’s not worth jeopardizing the safety of an employee in most cases, so brazen criminals are making life hell for many c-store retailers. Among the many recent shortfalls of government, the lack of support for law enforcement is one of the most glaring.

The continued labor challenge. Most retailers have gotten past the worst of the labor shortage, or at least have learned how to operate with fewer hands on deck. Turnover is still huge, though. One popular solution — giving new employees a bonus for staying a certain amount of time — hasn’t worked for all retailers. Many say the program only works until the date at which the employee qualifies for the stay bonus, and then they leave.

Increased inflation and stagnation. As the Fed continues to raise interest rates to combat raging inflation, stagflation is becoming a real threat. Stagflation is persistent high inflation combined with high unemployment and stagnant demand in a country’s economy.

Supply chain shortages. This is another pain point that is not as acute as it was a year ago, yet still lingers for a large variety of needed products, from store fixtures to foodservice ingredients. The best wholesalers are the ones that are honest with their retail customers about expected product delays and that can offer substitute items for missing product.

The new year may bring even more pain points for convenience store retailers to overcome. The prescription, in my view, is to concentrate on providing more value to your customers. Make it worth it to them to spend their time and money with your brand.

For comments, please contact Don Longo, Editorial Director Emeritus, at dlongo@ensembleiq.com.

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CONTENTS DEC 22

VOLUME 58 N UMB ER 12

30

COVER STORY PAGE 34

86 FEATURES

DEPARTMENTS

COVER STORY

EDITOR’S NOTE

34 Playing the Long Game Hall of Famer Brian Hannasch’s 40-year career in the industry has led him to head one of the largest convenience and mobility companies in the world.

26 New Products

3 Challenging Times Call for Sound Leadership The industry needs skillful and empathetic leaders more than ever.

VIEWPOINT

FEATURE

50 Rising to the Challenge The nation’s top c-store wholesalers are helping retailers overcome today’s obstacles.

4 Pain & Gain What are the pain points convenience store retailers will face in 2023?

12 CSNews Online

SMALL OPERATOR

30 Hungry for Change Hangry Planet seeks to redefine the traditional junk food landscape perpetrated by c-stores with the opening of the first-ever fully plant-based convenience store.

STORE SPOTLIGHT

64 Taking Flight Formerly known as Liberty Travel Plazas, the new Onvo brand aims to provide guests with a fun, friendly and memorable experience.

INSIDE THE CONSUMER MIND

86 The Health of Convenience Stores Six in 10 c-store shoppers are not satisfied with the current selection of better-for-you products.

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8550 W. Bryn Mawr Ave., Ste. 200, Chicago, IL 60631 (773) 992-4450 Fax (773) 992-4455 WWW.CSNEWS.COM BRAND MANAGEMENT VICE PRESIDENT & GROUP BRAND DIRECTOR Paula Lashinsky (917) 446-4117 - plashinsky@ensembleiq.com EDITORIAL EDITOR-IN-CHIEF Linda Lisanti llisanti@ensembleiq.com

16 INDUSTRY ROUNDUP

CATEGORY MANAGEMENT

14 Kwik Trip CEO Don Zietlow Retires

FOODSERVICE

16 Convenience Retailers Prepare to Move Into New Markets 18 Fast Facts 20 Eye on Growth 22 Retailer Tidbits 24 Supplier Tidbits TECHNOLOGY 62 Technology Takes a Seat at the Table Industry leaders talk all things innovation at the 2022 Convenience Store News Technology Leadership Roundtable.

62

56 Next-Level Foodservice Marketing Whether it’s a brand-new program or new items, c-stores need to get creative in marketing foodservice to grow profits and increase sales in this high-margin category.

TOBACCO

60 Inflation Bears Down on the Backbar How can convenience store operators cater to cash-strapped tobacco customers?

EXECUTIVE EDITOR Melissa Kress mkress@ensembleiq.com SENIOR EDITOR Angela Hanson ahanson@ensembleiq.com MANAGING EDITOR Danielle Romano dromano@ensembleiq.com EDITORIAL DIRECTOR EMERITUS Don Longo dlongo@ensembleiq.com CONTRIBUTING EDITORS Renée M. Covino, Tammy Mastroberte ADVERTISING SALES & BUSINESS ASSOCIATE BRAND DIRECTOR & NORTHEAST SALES MANAGER Rachel McGaffigan - (774) 212-6455 rmcgaffigan@ensembleiq.com ASSOCIATE BRAND DIRECTOR & WESTERN SALES MANAGER Ron Lowy - (330) 840-9557 - rlowy@ensembleiq.com ASSOCIATE PUBLISHER & MIDWEST SALES MANAGER Kelly Fischer - (773) 992-4464 - kfischer@ensembleiq.com ACCOUNT EXECUTIVE & CLASSIFIED ADVERTISING Terry Kanganis - (201) 855-7615 - tkanganis@ensembleiq.com CLASSIFIED PRODUCTION MANAGER Mary Beth Medley (856) 809-0050 - marybeth@marybethmedley.com DESIGN/PRODUCTION/MARKETING SENIOR CREATIVE DIRECTOR Colette Magliaro cmagliaro@ensembleiq.com ART DIRECTOR Lauren DiMeo ldimeo@ensembleiq.com PRODUCTION DIRECTOR Ed Ward edward@ensembleiq.com MARKETING MANAGER Krista-Alana Travis ktravis@ensembleiq.com SUBSCRIPTION SERVICES LIST RENTAL mbriganti@anteriad.com SUBSCRIPTION QUESTIONS contact@csnews.com

CORPORATE OFFICERS CHIEF EXECUTIVE OFFICER

Jennifer Litterick

CHIEF FINANCIAL OFFICER

Jane Volland

CHIEF PEOPLE OFFICER

Ann Jadown

EXECUTIVE VICE PRESIDENT, CONTENT & COMMUNICATIONS

Joe Territo

CHIEF OPERATING OFFICER

Derek Estey

CONVENIENCE STORE NEWS AFFILIATIONS Premier Trade Press Exhibitor

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

Convenience Store News (ISSN 0194-8733; USPS 515-950) is published 12 times per year, monthly, by EnsembleIQ, 8550 W. Bryn Mawr Ave., Ste. 200, Chicago, IL 60631. Subscription rates: Subscription rate in the United States: $125 one year; $230 two year; $14 single issue copy; Canada and Mexico: $150 one year; $270 two year; $16 single issue copy; Foreign: $170 one year; $325 two year; $16 single issue copy; Digital One year, digital $87; two year, $161. Periodical postage paid at Chicago, IL 60631, and additional mailing addresses. Copyright 2022 by EnsembleIQ. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording, or information storage and retrieval system, without permission in writing from the publisher. POSTMASTER: send address changes to Convenience Store News, 8550 W. Bryn Mawr Ave. Ste. 200, Chicago, IL 60631.

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CSNEWS ONLINE

ONLINE EXCLUSIVE TOP VIEWED STORIES

1

Kum & Go to Sell ‘Founder’s Store’

2

ExxonMobil Partners With Uber on Cash-Back Deal

Casey’s General Stores Inc. entered into an agreement to acquire the store, located at 2359 Edgington Ave. in Eldora, Iowa, the birthplace and hometown of Kum & Go founder William A. Krause. Kum & Go will continue to have a presence in Eldora, where it is working with the local high school on a renovation project that is expected to benefit the community for years to come, according to the company.

With the new Uber Pro Card, Uber drivers and couriers who fill up at any of the 12,000 Exxon and Mobil stations in the United States will get 3 percent cash back from Exxon in addition to Uber Pro Card’s 2 percent to 6 percent cash-back offering. The card’s offering depends on driver status.

3

Marathon Petroleum Launches Rewards Program Pilot

4

Three Trends Are Disrupting C-store Shopping Behaviors

Powered by Stuzo’s Open Commerce product suite, Marathon Rewards is designed to provide a personalized customer experience with targeted offers for specific store locations. It replaces the MakeItCount Rewards platform.

Working from home, electric vehicles and autonomous checkout are three mega trends having an impact that is significant enough to alter the basic financial equation for a c-store operator, according to recent research from VideoMining.

5

Buc-ee’s to Break Ground on Largest Travel Center

The retailer’s Luling, Texas, location will occupy more than 75,000 square feet, returning the title of the world’s largest Buc-ee’s to the state. The 66,335-square-foot New Braunfels, Texas, Buc-ee’s was eclipsed in February 2022 by the company’s 74,000-squarefoot flagship travel center in Sevierville, Tenn.

EXPERT VIEWPOINT

Improving the C-store Experience Through Digital Workforce Management To increase foot traffic by becoming a friendly, convenient destination for gourmet coffee, prepared foods and grocery staples, convenience stores must have a well-trained workforce. Without proper training and management, c-store operators won’t be able to take advantage of the opportunities at hand, writes Gary Stonell, senior vice president of sales and operations at Opterus.

Digital management tools and processes help to streamline operational excellence at scale and consistently deliver a great customer experience. Retailers can use them to create welcoming, personal experiences for each customer; ensure efficient processes are in place; take the stress out of shift scheduling; and make convenience stores more than just convenient.

VIDEO: Words of Wisdom From Convenience Store News’ Women of the Year Convenience Store News’ 2022 Top Women in Convenience Awards Gala celebrated a record 91 honorees, including five Women of the Year.

During the event, held against the backdrop of the 2022 NACS Show, these five exceptional female leaders received special recognition and shared advice and insights with CSNews Editorial Director Emeritus Don Longo based on their experience and achievements.

For more exclusive stories, visit the Special Features section of csnews.com.

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INDUSTRY ROUNDUP

Kwik Trip CEO Don Zietlow Retires Scott Zietlow, chair of the board, will take the lead at the Midwest convenience store chain AFTER 52 YEARS, Kwik Trip Inc. President and CEO Don Zietlow will retire at the end of 2022.

He has spent 22 years in his current role.

Kwik Trip’s chair of the board and secondgeneration owner Scott Zietlow will succeed his father, effective Jan. 1. He will retire from his role as a professor of surgery in the Trauma, Critical Care and General Surgery Division of Mayo Clinic in Rochester, Minn., to assume his new responsibilities at La Crosse, Wis.-based Kwik Trip.

“I am honored to follow my dad’s legacy of guiding Kwik Trip,” Scott Zietlow said. “We are a very strong company and with our 36,000 phenomenal coworkers, great retail locations and industry-leading vertical integration, our future is bright.”

During Kwik Trip’s 50th anniversary celebration in 2015, Don Zietlow said the company is “in good hands” with the second and third generations of the Zietlow family.

Kwik Trip’s first convenience store opened in Eau Claire, Wis., in 1965. Five years later, Kwik Trip added gasoline sales to that store. The

retailer expanded its reach to La Crosse and grew its portfolio to five stores in 1971.

In 1972, Don Zietlow and John Hansen established ownership positions, and the company remained jointly owned until the Zietlow family bought the Hansen family’s interest in 2000.

Fast forward to the present day, Don Zietlow’s leadership has brought substantial growth and innovation to Kwik Trip. The company currently operates more than 800 locations in Wisconsin, Minnesota, Iowa, Illinois and Michigan. Kwik Trip’s Support Center in La Crosse has grown vertically, including major capital investments in dairy, kitchens, bakeries and a distribution center.

During his tenure, Don Zietlow was the driving force behind sharing 40 percent of the company’s pretax profits with all coworkers.

He was inducted into the Convenience Store News Hall of Fame in 2015.

As part of the new leadership team at Kwik Trip, Tom Reinhart has been appointed chief operating officer. Jeff Wrobel will continue in his role as chief financial officer.

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INDUSTRY ROUNDUP

Convenience Retailers Prepare to Move Into New Markets Kum & Go will be opening in Detroit in 2023 and Royal Farms is planning new stores in North Carolina is adding a new market to its expansion plans. The convenience store retailer will welcome customers at a set of Detroitarea stores in 2024, with plans to open more than 50 stores in the market over the next several years.

KUM & GO LC

The Des Moines, Iowa-based chain made news last year with announcements that it would enter Utah and Michigan. This year, the company revealed it will also set up shop in Idaho.

Family-owned Kum & Go will open in Grand Rapids, Mich., Salt Lake City, and Boise, Idaho, over the next year, bringing its retail footprint to 14 states.

“We are excited to announce our entry into the Detroit market. We’ve been warmly welcomed as we prepare to enter the Grand Rapids area, and with the addition of Detroit, believe Kum & Go will be the lead convenience operator across the state as we continue our growth and expansion,” said CEO Tanner Krause. “Michigan is full of great people and great communities, and we know Kum & Go’s fresh perspective to convenience will create many opportunities there.”

Kum & Go will bring a fresh perspective centered around people, food and digital technology to Detroit and the surrounding

communities, the company stated.

Established in Hampton, Iowa in 1959, Kum & Go is a fourth-generation, family-owned convenience store chain with more than 400 stores in 11 states.

As Kum & Go prepares for expansion, Baltimorebased Royal Farms plans to open its first convenience store in North Carolina early next year.

The retailer’s first store will open in Grandy, with additional sites planned for New Bern, Greenville, Lumberton, Kinston and Jacksonville, N.C. “We are very excited to pioneer into the First Flight State and expand our offerings into the community. Not only does Royal Farms bring value and more convenient options to neighborhoods, but we are also passionate about giving back to the areas we do business in,” said Aliyah Atayee, public relations manager at Royal Farms.

Royal Farms plans to eventually open more locations in other areas of the state to provide the North Carolina community with more convenient options, the company stated.

Founded in 1959, Royal Farms operates more than 260 locations throughout the Mid-Atlantic, including Maryland, Delaware, Virginia, West Virginia, New Jersey and Pennsylvania.

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INDUSTRY ROUNDUP

FAST FACTS

2%

32times 13.5%

Hard seltzer sales declined 2 percent year over year for the third quarter, and retailers only expect a modest recovery in 2023.

The top 8 percent to 10 percent of loyalty members visit a c-store an average of 32 times a month — more than once a day — and four times as often as the next highest tier.

— Beverage Bytes, Goldman Sachs

— Second Annual Paytronix Loyalty Report

Seasonal Halloween candy prices increased 13.5 percent compared to 2021, while volumes were down 2 percent due to significant declines in the more expensive chocolate segment.

— October 2022 Price Check, IRI

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INDUSTRY ROUNDUP

Eye on Growth

Yesway’s total store count grew to 425 sites with the opening of three Allsup’s locations in Texas in mid-November.

As of last month, the retailer opened 39 new-to-industry and relocated stores to date in 2022.

Holt Oil exits the convenience channel with the transaction.

Petroleum Marketing Group Inc. picked up 19 convenience stores and gas stations in North Carolina from Holt Oil Co. The transaction also included Holt’s wholesale dealer business.

Majors Management LLC and its affiliates closed on the purchase of 10 Chevronbranded c-stores, a dealer wholesale business, and a commercial fuels and

lubricants business from Morgan Oil Co Inc. The deal also included an associated bulk plant facility.

The Cigarette Store LLC dba Smoker Friendly expanded its network with the addition of 30 stores across Indiana and Kentucky as part of its acquisition of Seymour, Ind.-based Collett Enterprises Inc. Chevron U.S.A. Inc. inked a definitive agreement to take full ownership of Beyond 6 LLC (B6) and its network of 55 compressed natural gas stations. B6 is co-owned by a Mercuria Energy Trading subsidiary and B6 CEO Andrew West.

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INDUSTRY ROUNDUP

Retailer Tidbits

7-Eleven Inc. inked a clean energy agreement for all of its southeast Michigan c-stores. The retailer aims to achieve 100 percent renewable energy for the 160 sites for 20 years beginning in 2025.

Stewart’s Shops opened an online store in time for the holiday season on Cyber Monday, Nov. 28. The site features limitededition Stewart’s merchandise, as well as coffee, gift cards and gas cards.

Circle K stores will be part of a medical cannabis pilot in Florida. Green Thumb will roll out 10 RISE Express branded dispensaries adjacent to Circle K locations next year.

GoMart tapped Francis Energy to bring greater electric vehicle (EV) charging accessibility throughout West Virginia, Virginia and Ohio. Francis Energy will install and operate its EV fast charging stations at 51 GoMart locations.

Jacksons is currently the only c-store retailer offering this option for Instacart delivery in Idaho.

Jacksons Food Stores Inc. and ExtraMile

by Jacksons are now accepting Electronic Benefits Transfer Supplemental Nutrition Assistance Program payments for orders made through Instacart.

Casey’s General Stores Inc. partnered with AtoB to reduce fuel costs when customers use the AtoB Visa fleet card.

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INDUSTRY ROUNDUP

Supplier Tidbits

The companies signed a long-term, nonbinding global memorandum of understanding to explore commercial opportunities for reduced-risk products.

Vroom Delivery completed its latest fundraising round, with Wesco, Hutchinson Oil dba Hutch’s and FavTrip among the investors. The new capital will allow Vroom to accelerate growth and invest in new features and automation development.

Altria Group Inc. and JT Group have formed a joint venture to market and commercialize heated tobacco stick products in the United States. The pact includes Ploombranded devices and Marlboro-branded consumables.

PepsiCo launched a new Restaurant Royalty Residency program, which will bring the offerings of Black-owned restaurants across the United States to Las

Vegas. The initiative is part of the Pepsi Dig In Restaurant Royalty project.

Avery Dennison entered into an exclusive partnership with the San Francisco 49ers.

The company will introduce digital connectivity into select 49ers Fanatics merchandise in the form of smart embellishments and digital labels.

Ruiz Food Products acquired the assets of Culinary International LLC through its subsidiary RG1 Holding Co. LLC. The company immediately took over manufacturing operations of Culinary International’s manufacturing facility in Vernon, Calif., and its nearby dry goods and cold storage facility.

Talking Rain’s Sparkling Ice beverage brand reintroduced its loyalty program, Sparkling Ice Rewards. Members can engage in different activities to earn punches, including logging into Sparkling Ice Rewards, and taking polls and surveys.

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NEW PRODUCTS

Reese’s Big Cup Stuffed With Reese’s Puffs New from The Hershey Co., the classic combination of peanut butter and chocolate collides with Reese’s Puffs cereal to create a unique Reese’s experience. The latest mashup from the brand, Reese’s Big Cup Stuffed With Reese’s Puffs, hit store shelves in November.

According to Henry Hancock, senior associate brand manager for Reese’s, the collaboration takes chocolate and peanut butter fandom to a new stratosphere.

THE HERSHEY CO. • HERSHEY, PA. • THEHERSHEYCOMPANY.COM

Jose Cuervo Sparkling Cocktails Jose Cuervo unveiled new packaging for its entire portfolio of Sparkling Cocktails. Each flavor design incorporates vibrant colors and unique elements reminiscent of its cocktail. The brand is also debuting two new flavors: Tequila Mule, a tequila twist on the classic Moscow Mule; and Pink Lemonade Margarita, featuring ripe raspberries, strawberries and oranges up front, with a sweet lemon peel and tequila finish. Jose Cuervo Sparkling Cocktails are available nationwide in four-packs for a suggested retail price of $12.99.

PROXIMO SPIRITS • JERSEY CITY, N.J. • CUERVO.COM

BIC Special Edition Astrology Series Lighters Consumers can show off their zodiac signs with the new designs in the refreshed Astrology Special Edition Series by BIC. All 12 zodiac signs are brought to life through the stunning work of award-winning illustrator, graphic novel and story development artist Nathan Fox in this refresh, according to the company. The lighters in this series have a suggested retail price of $2.19 per lighter. All BIC Maxi Lighters are longlasting, reliable and 100 percent quality inspected.

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Trolli Sour Duo Crawlers Trolli takes gummi worms to the next level with the launch of Sour Duo Crawlers. The brand’s latest innovation is a fruity flavored, dual-textured sour gummi worm that delivers a multisensory experience, according to the maker. These crawlers combine two sour tropical flavors, with one side that’s a classic chewy gummi and another side that’s whipped and aerated for a soft and squishy texture. Each pack features three flavor combinations: Mango/Pineapple, Citrus/Watermelon and Strawberry/Guava.

FERRARA CANDY CO. • CHICAGO • FERRARAUSA.COM

BTC Power All-In-One DC Fast Charger BTC Power introduced its 180-kilowatt All-In-One (AiO) DC Fast Charger at the 2022 NACS Show. This is the first of the company’s new Gen4 products, which can charge an electric vehicle’s battery to 80 percent in as little as 10 minutes. The fast charger features two touchscreen options, 15-inch or 32-inch, to communicate messages to customers; ADA-compliant retractable cables; and simultaneous charging capabilities. The 180-kilowatt AiO DC Fast Charger also boasts a compact design with a footprint similar to a standard gas pump.

BTC POWER INC. • SANTA ANA, CALIF. • BTCPOWER.COM 26 Convenience Store News C S N E W S . c o m

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NEW PRODUCTS

Hawaiian Breeze Extra Strength 5-hour Energy Shot The 5-hour Energy brand unveiled several new products at the 2022 NACS Show.

Making its debut was the Hawaiian Breeze Extra Strength 5-hour Energy shot, which will be supported by national advertising in early 2023. The extra strength formula features B-vitamins, amino acids, nutrients and 230 milligrams of caffeine.

Additionally, the brand introduced three new flavors of its 16-ounce carbonated 5-hour Energy beverages: OrangeSicle, Pineapple Splash and Tropical Burst. The addition of these flavors doubles the brand’s number of energy drink products.

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Fi-Being The maker of Hi-Chew, Morinaga America Inc., brings a new brand into the better-for-you candy category: Fi-Being. Each serving of the hard candy offers 39 percent of the daily recommended dietary fiber intake. Fi-Being provides 11 grams of dietary fiber per serving, while containing just 4 grams of sugar and no sugar alcohol. The candy comes in Passionfruit and Elderberry flavors, and is offered in a 1.76-ounce bag for a suggested retail price of $3.29.

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Peruvian Cold Espresso Concentrate Javo Beverage Co. seeks to stir up the cold brew market with its new Peruvian Cold Espresso Concentrate, a liquid espresso coffee concentrate made with 100 percent Peruvian Arabica coffee. One ounce is equivalent to an espresso shot.

The product allows for the ease and convenience of handcrafting authentic hot and cold espresso-based beverages, desserts and sauces without the need for an espresso machine, according to the company.

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Duro Tamper-Evident Bags Duro, a Novolex brand, is introducing Load & Fold Shopping Bags and Load & Seal Shopping Bags, tamper-evident paper bags that offer more secure transport and delivery for retailers and restaurants. The bags feature a wide opening for easy loading, a flat bottom to keep items secure and sturdy paper twist handles for easy and reliable carrying. The Load & Fold bags offer an upscale folded top security option using a customer-supplied branded label or other adhesive to seal the bag. The Load & Seal bags offer a built-in, tamper-evident adhesive strip to securely seal the bag. Both options come in a variety of popular sizes and can be branded with advertising and logos.

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Phronesis Signage System FoodSignPros is updating roller grill signage with the Phronesis Signage System, an all-in-one roller grill signage and management solution that features wireless LED roller grill flavor IDs and signage. Phronesis helps solve the problems of traditional roller grill signage, and delivers the premium experience and visuals of digital signage without the cost or complexity, according to the company. It boasts a reimagined divider system to optimize customer lines of sight, organize product and wirelessly illuminate grill signs. The system also allows operators to block customer access to any amount of still-cooking food, while continuing to sell product.

FOODSIGNPROS • BROOMALL, PA. • FOODSIGNPROS.COM 28 Convenience Store News C S N E W S . c o m

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SMALL OPERATOR

Hungry for Change Hangry Planet seeks to redefine the traditional junk food landscape perpetrated by c-stores with the opening of the first-ever fully plant-based convenience store

By Danielle Romano COMING ACROSS AN undercover investigation into organic dairy farms by Animal Recovery Mission inspired actor, entrepreneur and philanthropist Bobak Bakhtiari to launch Hangry Planet, North America’s first fully plantbased convenience store.

Hangry Planet offers carefully curated snacks, meals, certified organic desserts and more that are sourced and vetted to assure that every product in the store is sustainable, animal product free, and cruelty free.

This offers a unique experience for mindful consumers who can now shop with a clear conscience and no “fineprint” ingredients or farming reading required, according to Bakhtiari.

“As an ecstatic steak and dairy/cheese enthusiast, I was abruptly buzz-killed by the reality of rampant abuse on dairy farms and how I have been blindly fueling abuse via traditional embrace of food choices,” he told Convenience Store News. “Further research on factory farming via AnimalEquality.org solidified the vision to prove that cruelty-free dining can be

delicious and can also contribute to more optimal personal health and planet health.

“With Hangry Planet, I sought to affirm that we truly don’t need to support stealing baby calves from mom to offer cheese, dairy or dairy-containing c-store snacks to humans,” he explained.

A Craveable Experience Located at the Tanforan Shell station at 1199 El Camino Real in San Bruno, Calif., Hangry Planet occupies nearly 1,500 square feet. It took nearly six months to bring the concept to fruition.

The mission of Hangry Planet is to “transform the compulsive junk food milieu of traditional c-stores into healthy havens of grab-and-go meal yumminess.”

“The San Francisco Bay Area felt like the right location [to debut this concept] because of the growing momentum

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SPONSORED EDITORIAL

What is Tobacco Harm eduction?

Mary Elizabeth T. Barwick Reynolds American Inc. RAIS Vice President, Strategic Engagement

G EATE T

Reynolds is committed to reducing the health impact of our business, and Tobacco Harm Reduction, or THR, is an important component of that commitment.

The concept of harm reduction is a science-based, public health strategy intended to lower the health risks associated with high-risk behaviors; seat belts in cars are a classic example. Tobacco Harm Reduction provides adult smokers uninterested in quitting altogether with accurate information and access to potentially less harmful alternatives to cigarettes such as vapor, tobacco heating, oral nicotine and smokeless, and encourages adult smokers to consider switching.

cience upports TH There are scientifically proven differences in the health risks of various tobacco products. Cigarettes are by far the most risky, and comparatively, products like e-cigarettes, nicotine pouches and snus carry less risk. The primary reason is that these other products do not involve combustion.

“Though more research on both individual and population health effects is needed, many studies suggest e-cigarettes and noncombustible tobacco products may be less harmful than combustible cigarettes.”

- U.S. Food and Drug Administration, 2022

TH is mportant for Public Health & etailers Our vision is to build A Better Tomorrow® by reducing the health impact of our business through offering a greater choice of enjoyable products for our adult consumers. These innovative products will continue to be available in retail outlets across the country.

Tobacco Harm eduction LOWE

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Based on Abrams et al., Fig. 2 (2018)

igs hes , Gum o Use E-c Pouc N hes e n atc oti eP n i Nic ot Nic

But adult consumer adoption and use is dependent on broader access to accurate information about THR and these alternative nicotine products. In spite of the science, some U.S. policymakers continue to propose and enact prohibitionist policies in the form of regressive taxes and outright bans on these products at the local, state and federal level.

Collectively, we must work to promote pro-THR policies and give adult consumers accurate information and prevent unreasonable bans and taxes that limit consumer choice and the acceptability of these alternatives. We want to empower adult nicotine consumers to understand the potential benefits of tobacco harm reduction, and you can help us do that. THR is an important public health movement that not only benefits adults who smoke but also creates broader societal benefits across the United States.

You can learn more about THR and our commitment to a Better Tomorrow® at www.reynoldsharmreduction.com can to Learn More > This is intended to facilitate public policy discussion. Reynolds does not make health or cessation claims regarding its brands. Reynolds is not responsible for the content of referenced sources and the views expressed may not represent the views of Reynolds. No tobacco product is safe, all tobacco products containing nicotine are addictive. Youth should never use tobacco. Smokers who are concerned about their health should quit. © RAIS (2022)

*Reynolds American Inc. and its operating companies (collectively referred to here as “Reynolds”)

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SMALL OPERATOR

and affinity toward plant-based cuisine in the area, and the accessibility of West Coast vendors that offer ample plantbased snacks and meals that are actually very tasty,” Bakhtiari said.

Hangry Planet carries somewhere around 3,500 SKUs. A team of vastly different personalities has to audition items that ultimately Bakhtiari or Assistant Manager/Deputy Commander of Operation Nourish Joss Montiel will select to carry. Among the key criteria products must meet to be considered are caliber of yumminess and how processed it is.

The store offers a range of vegan and plant-based grab-and-go meal options, like the Hangry Bliss Breakfast Sando, which features Beyond Meat, JUST Egg and Follow Your Heart Cheese on a gluten-free bagel; hand pies like the Beyond Meat based mushroom-sausage scramble; Daiya plant-based burritos; Dr. Praeger’s veggie burgers; and vegan empanadas.

On the beverage side, a Laird’s Superfood machine serves up vegan hot cocoa and golden milk. Additionally, customers can access an array of prebiotic sodas and nine brands of kombucha.

Hangry Planet also fulfills the desire for sustainable and satiable desserts.

Tapping local bakeries, the c-store offers certified organic vegan pastries from Black China Bakery, and artisan vegan cookies from Kerri Kreations, both based in Santa Cruz, Calif. There are also vegan doughnuts made from locally sourced ingredients from Oakland, Calif.’s Donut Farm.

And because no convenience store is complete without craveable snacks, the market stays stocked with healthy, plant-based snacks that champion Hangry Planet’s “Feel Beautiful, Not Junky” tagline. The offering includes a range of vegan and plant-based candy bars from Go Max Go Foods that boast attributes such as gluten free, non-GMO ingredients, no corn syrup, no artificial ingredients and non-dairy chocolate.

Hangry Planet isn’t just limited to the store either. Outside, Bakhtiari has created a regional hotspot known for colorful and comical sculptures, live music and a VR Car Wash, a touchless tunnel car wash that offers cinematic and immersive experiences.

All products carried at Hangry Planet are vetted and must meet certain criteria, such as caliber of yumminess and how processed it is.

“At Hangry Planet, we don’t preach veganism, we bedazzle taste buds with very yummy food that’s also much less processed than the average c-store.”

— Bobak Bakhtiari, Hangry Planet As part of the brand’s mission, Hangry Planet leverages health education, sustainability and animal rights through partnerships, as well as the retailer’s 10 percent social impact giving, whereby 10 percent of every sale goes to several different charities supporting animal and human rights, schools, orphanages, and impoverished communities globally.

Destination: Growth So far, the customer response to Hangry Planet has been “overwhelmingly positive,” Bakhtiari reported, and also very curious, prompting him to build a resource site called AnimalJoy.org to answer frequently asked questions.

“At Hangry Planet, we don’t preach veganism, we bedazzle taste buds with very yummy food that’s also much less processed than the average c-store,” he said. “Outside of the plant-based agenda, right off the bat, there was a growing community of folks excited that we’re not trying to slowly murder customers with high-volume junk food, but that ‘Feel Beautiful, Not Junky’ is at the forefront of the mission with more abundantly healthy options.”

Bakhtiari noted that once the vegan community zeroed in on the store, Hangry Planet became more of a destination. For that reason, sales are more robust now than they had been.

With Hangry Planet’s growing popularity, Bakhtiari plans to open more locations. He’s been approached about expansion investment and is currently in talks to introduce a store to the Ann Arbor, Mich., area.

“While it appears the c-store milieu is a great pipeline for expansion as health takes a greater priority, there’s also talks about opening a larger grocery store that fuels planet- and animal-friendly choices on a grander scale,” he said. CSN

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COVER STORY

2022

PLAYING THE LONG GAME Hall of Famer Brian Hannasch’s 40-year career in the industry has led him to head one of the largest convenience and mobility companies in the world

By Melissa Kress

is an industry where many teenagers turn for a first job. They may be looking to earn some spending money or save for college, but either way, they’re only thinking of that job as a steppingstone to their next chapter.

THE CONVENIENCE CHANNEL

Others grow up in the industry, sweeping floors and stocking shelves in their family’s store, thinking of it as the first step to eventually leading that company.

For a few, like Brian Hannasch, president and CEO of Laval, Québec-based Alimentation Couche-Tard Inc. (ACT), the journey to — and through — the industry is completely unintentional. At 16, Hannasch took a job in a convenience store, which he describes as a traditional two- to three-bay repair facility that sold candy and beverages out of a few coolers. Fast forward to today and he now leads one of the largest convenience and mobility companies in the world.

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For his dedication and commitment to the industry, Hannasch is being honored as the 2022 retailer inductee into the Convenience Store News Hall of Fame.

He was previously recognized as the 2019 Retailer Executive of the Year.

Finding the Right Path As he told CSNews, a career in the c-store industry was never the game plan. He was the first in his family to go to college and after earning a finance degree from Iowa State University, he took a job with a big company. His next step was to earn a Master of Business Administration (MBA) degree from the University of Chicago with his eye on Wall Street.

“I was lucky that as I continued working and doing my MBA at night, I realized I liked the operations side more than the finance side. I liked building things. I liked solving problems, and I liked working with people,” he recalled. At the time, he worked for Amoco and had the chance to pivot into an operations role on the convenience and fuel side.

“I loved that piece and I never looked back at the finance side,” he said. “It got me on the right path.”

After approximately 12 years with Big Oil, Hannasch left for a smaller, more entrepreneurial environment. Nine months later, that company was acquired by “four guys from Montreal.” The 2001 acquisition of 225 Bigfoot stores from Johnson Oil Co. Inc. marked ACT’s entry into the United States.

“That was a big piece of luck,” Hannasch said. “The company wasn’t very big at the time — less than a thousand stores — and it’s been a great journey to help build ACT into what it is today.”

Were it not for his pivot to the operations side, Hannasch would have taken a swing at Wall Street and likely would not have liked it, he admits. “I would have probably done ‘big company’ stuff and while we are a big company today, I like to think we have retained our entrepreneurial roots,” he explained. “Four guys started the company with one store in the early ‘80s and we try to keep some of those values and culture intact.”

Wall Street’s Loss Is the C-store Industry’s Gain Since moving into the chief position at ACT in September 2014, the company has

Under Hannasch’s watch, Alimentation Couche-Tard Inc. launched the global Circle K brand and began making a unified mark around the world.

grown to be the largest in Canada in terms of revenue, and one of the largest convenience store groups in the world, operating in 25 countries.

Under Hannasch’s watch, ACT has expanded through multibillion-dollar acquisitions, including Cary, N.C.-based The Pantry in 2015, and San Antonio-based CST Brands and Midwest-based Holiday Cos. in 2017.

On the international front, ACT grew through its purchases of Statoil Fuel & Retail of Scandinavia and Eastern Europe in 2012; Topaz Energy Group Ltd. of Ireland in 2016, and 279 Esso-branded fuel and convenience sites in Ontario and Québec from Imperial Oil Retail later that year; and the acquisition of Circle K franchise stores in Hong Kong and Macau from Convenience Retail Asia in 2020.

It has also been under Hannasch’s watch that Couche-Tard’s global Circle K brand has taken shape and begun making its unified mark around the world.

“It’s been rewarding to be on this side, even though we have turned into a bigger company and all the good and the bad that goes along with that,” he said. “It’s been a good journey to try to make sure some of those things that were important to me when I shifted from a big company to a small company are still alive in the company today.”

Balancing Act With growth comes the responsibility to stay true to the needs of

DE CE MB E R

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CONGRATULATIONS

BRIAN HANNASCH President and CEO, Alimentation Couche-Tard

FOR YOUR INDUCTION IN CONVENIENCE STORE NEWS'

RETAILER HALL OF FAME THANK YOU FOR BEING A GAME CHANGER

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COVER STORY

Since Hannasch moved into the chief executive position in 2014, the company has grown to be one of the largest convenience store groups in the world, operating in 25 countries.

existing employees and customers while expanding the network — something Hannasch acknowledges is a balancing act.

but we still have very self-sufficient business units that stay close to their customers and their employees,” he pointed out.

“I really think we have been thoughtful about how we structure the company. We are not as decentralized as we once were,

While pursuing merger and acquisition (M&A) opportunities, there are ACT associates running the day-to-day aspects of the business. It’s “a very small piece of the organization that is focused on that M&A and integration,” according to Hannasch.

“We try to play the long game and stay focused on our people, focused on the customers and understand that there is short-term volatility in the business.

That has enabled us to make the right investments over time toward a strategic environment.”

— Brian Hannasch, Alimentation Couche-Tard Inc.

“If we were a very centralized organization, I think the risk of getting distracted would be much higher,” he said. “That has been one of our recipes for not only doing M&A, but integrating people well. We have people that can focus on both sides: welcoming people into the company and, at the same time, people staying focused on our customers and our employees.”

With growth also comes the concern of becoming too big. “I fear it every day. It’s no secret that internally, my biggest fear is protecting our culture. It’s what has made us successful,” Hannasch shared. “We try to be humble, and we try to do the right thing. We try to believe that people get up and come to work wanting to do the right thing every day.

“As you get bigger, there is a risk that politics can enter the conversation, bureaucracy can slow you down, and you can lose sight of the customer and the store — which is why we are all here,” he continued. “It is a fight. We have

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36TH ANNUAL

HALL OF FAME BRIAN HANNASCH President and Chief Executive Officer

Congratulations to all the 2022 Hall of Fame Inductees, including our very own, Brian Hannasch! Thank you for your steadfast leadership and your contributions to our industry.

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COVER STORY

The Hall of Famer is focused on protecting the company culture even as it grows into an international retail powerhouse.

a lot of conversations, and having those conversations is very important to making sure the friction stays there. It’s way up there on the things I think about.”

their careers in the company over the 20-plus years I have been here, seeing them raise their families and put their kids through college. All of those things will be what I look back on and value through the years.”

The key is not getting caught up in the short term. “We are good at not being short-term focused. We try to play the long game and stay focused on our people, focused on the customers and understand that there is short-term volatility in the business,” he explained.

“That has enabled us to make the right investments over time toward a strategic environment.”

Changing Landscape

The retail and mobility businesses, though, are hard and not without challenges, as they are both fast-paced and high-volume industries.

“It’s a lot going well every day, and it’s a certain percentage of things going wrong every day. Whether that is people getting injured on the job. Whether it’s a robbery.

Whether it’s the challenge of hiring and retaining people in our industry at the wage level that is traditionally paid,” Hannasch said.

Yet despite the challenges, the convenience business offers many rewards.

“For us, the growth and financial success has been great but, as I look back now, what I find rewarding is building a better company, a better brand and at the heart of that is the people,” the new Hall of Famer said. “Seeing people grow within

The convenience store concept has changed a lot since Hannasch’s first job at 16 years old, and he has had a front-row seat to the channel’s evolution.

“To look at where we are today within the industry is just amazing. You look at the development of the offer. You have great companies like Wawa, Kwik Trip, QuikTrip, Sheetz. They have really innovated on the food side and given our industry some legitimacy as a place to stop and grab a quick meal. They set a high bar for the industry. The industry is gaining respect and gaining consumers’ stomach and heart, which has been great,” he said.

The chief executive also points to the proliferation of brands inside the store — from Coke, Diet Coke, Pepsi and Mountain Dew to energy drinks, waters and isotonics. “There are hundreds and hundreds of brands in that space,” Hannasch noted, adding that the pivot to better-for-you quick snacking has also been great for the channel.

“Ultimately, what it boils down to is we sell time to people. I think the industry has done a great job of evolving over time and making sure we are fulfilling that need and giving customers a little bit of time back in their day,” he told CSNews. “There is not much we sell that Walmart doesn’t have, but our ability to do it in a friendly, fast way continues to be our differentiator.”

The business is going to continue to change, he predicts, and people will continue to try to disrupt or redefine what convenience means. The imperative is to adapt.

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DOUG HAUGH P si P kl

t

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BRIAN HANNASCH P si lim t ti

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*

*Source: Information Resources, INC. C-MULO 52 weeks ending 06/05/22

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COVER STORY

Hannasch sees the convenience store industry as a great environment for individuals to hone their people skills.

“It’s important for us to remember that we sell time to people, and we have a challenge to give our customers what they want from us when and where they want it, and that is not going to look the same as it does today,” Hannasch explained.

For this, he sees ACT’s size playing a pivotal role. With the benefit of scale, the company can utilize its data and its talent to really differentiate its offer. This includes having the right products at the right price and a very local business, to having a good food offer, deploying technology to get customers in and out of its stores quickly, communicating with customers the way they want to be communicated with, and M&A. “M&A has been a part of our company’s DNA since we started, and we like to play offense. If you are not playing offense, you are not playing to win,” Hannasch said. “We are blessed to have a very strong global footprint with some great markets that have a lot of growth opportunities for us. We will continue to look at opportunities and pull the trigger when we think it is a good value for our shareholders and us.”

Words of Wisdom So, what would the newest retailer Hall

“Seeing people grow within their careers in the company over the 20-plus years I have been here, seeing them raise their families and put their kids through college. All of those things will be what I look back on and value through the years.”

— Brian Hannasch, Alimentation Couche-Tard Inc. of Fame inductee tell a 16-year-old who is starting an afterschool job in a convenience store today?

“People that I look at who have been successful — either financially or raising families or having a lot of friends — tend to have very good communication skills and very good people skills regardless of the job,” Hannasch said.

“It’s a tremendous environment to hone your people skills and to try to figure out what the customer wants, why they want it, what mood they are in, and how you can make it a little bit better. I think that is a skill set that will serve any young person very well in their life’s journey.” CSN

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VISIONARY LEADER

DOUG HAUGH 2022 Retailer Executive of the Year

Thank you for your leadership, business acumen, dedication to the industry and community service!

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COVER STORY

Building Relationships

Supplier Hall of Famer Brent Cotten spends every day giving 110 percent

By Tammy Mastroberte

30 years, Brent Cotten’s career has advanced with The Hershey Co., taking him from a sales representative to the vice president of customer and industry affairs. He credits one of the keys to his advancement as something he heard many years ago.

FOR MORE THAN

“Someone told me, ‘Wake up every day thinking today is your Super Bowl,’ because you have to give your best every day,” said the newest Convenience Store News supplier Hall of Famer. “It’s also important to be open to learning from others instead of thinking you have all the answers. Be willing to learn, but wake up every day and make sure you are giving 110 percent.”

In his current role, Cotten is on the road for more than 40 weeks each year, traveling the United States to represent Hershey at trade association events and meetings, as well as customer events to build and nurture relationships. His days consist of face-to-face interactions with retailers and the Hershey sales team, and he is often involved in customer meetings at various events.

“We will have 45-minute customer sessions at a lot of trade association events, and I’m there working to understand what their business needs are and interacting with them,” he explained.

“We recently went to a show for the Convenience Distribution Association and had between 48 and 52 customer meetings.”

For the past nine years, Cotten has worked to continuously help Hershey establish and build relationships with industry leaders and retailers. He took over the role from fellow CSNews Hall of Famer Tom Joyce, who created it when he was at the company.

“I’ve always believed relationships with our customers were very important because people do business with people they know and trust, and I’ve always had the ability to build relationships with

Cotten is on the road more than 40 weeks each year, representing Hershey at events and customer meetings.

“I love the collaboration the c-store industry has with one another. It’s one of the few industries where you will see retailers — even competitors — really pulling for each other and wanting one another to succeed.”

— Brent Cotten, The Hershey Co. customers,” Cotten said, noting that running national accounts for the convenience channel over the years introduced him to the importance of relationships within the industry.

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Congratulations to the 2022 Hall of Fame Inductees!

RETAILER HALL OF FAME Brian Hannasch President and CEO Alimentation Couche-Tard

RETAILER EXECUTIVE OF THE YEAR Doug Haugh President Parkland USA

Thank you for your business partnership and your outstanding service and contributions as leaders in the convenience store industry.

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COVER STORY

A C-store Veteran Cotten’s career at Hershey started after graduating from Middle Tennessee State University with a Bachelor of Business Administration degree in marketing. He was introduced to the candy company by a food broker in the grocery industry, whom he worked for during college doing merchandising, displays and promotional activities.

“I started as a sales representative in the grocery industry at Hershey in February 1992 with a territory outside of Nashville, Tenn., doing display resets and merchandising,” he recalled.

He was promoted to district account supervisor in Knoxville, Tenn., and then to Knoxville district manager. He also held several leadership positions introducing him to the c-store market, including Atlanta convenience district manager, Southeast customer sales executive for convenience and Southeast area sales manager.

In June 2006, he became the director of national accounts for convenience, a role where he was responsible for the sales of U.S. strategic c-store customers.

“I love the collaboration the c-store industry has with one another,” Cotten said. “It’s one of the few industries where you will see retailers — even competitors — really pulling for each other and wanting one another to succeed. You will see people who are fierce competitors in the room together working on issues to help the industry as a whole.”

To help advance the industry, he completed a term as chairman of the NACS Supplier Board in October, and now moves into the role of past chairman for the next four years.

“This has been the first year we are back to our meetings post-COVID. The two chairmen before me had that part of the role disrupted, but this year we had our meetings, and it’s been great to get the supplier board back together and have that interaction and meetings with retailers,” he said.

Cotten is also very active in the confectionery industry, and represents Hershey on a number of boards, including the National Confectionery Sales Association,

Cotten helped cut the ribbon on Hershey's new booth at the 2022 Sweets & Snacks Expo.

“I’ve also always lived by ‘do the right thing no matter who is watching,’ because you will never get in trouble by doing the right thing.”

— Brent Cotten, The Hershey Co.

where he is the chairman of its State of the Industry Committee; the Convenience Distribution Association; FMI Foundation; and NACDS Retail Advisory Board.

Doing the Right Thing Cotten is no stranger to awards and accolades. He was elected the 2007 Southern Association of Wholesale Distributors’ Candy Representative of the Year, and inducted into the National Confectionery Sales Association’s Hall of Fame in 2019 — which is the candy industry’s highest honor. It’s also the achievement he is

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COVER STORY

Cotten received the candy industry's highest honor with his induction into the National Confectionery Sales Association’s Hall of Fame in 2019.

most proud of in his career thus far.

“Being elected into the Candy Hall of Fame was a big achievement in my career and represents the entire confection category,” Cotten explained. “That is something I have always dreamed about accomplishing in my career. And I’m also proud of the Convenience Store News Hall of Fame award, too. Working in the c-store industry for so long, and seeing my peers be recognized, it’s right at the top of the list as well.”

His two mentors, Hershey executives Joyce and Dave Onorato, were both inducted into the CSNews Supplier Hall of Fame. According to Cotten, one of the best pieces of advice he ever received during his career came from Onorato.

“He told me, ‘Don’t let your highs be too high or your lows be too low,’ and I’ve always quoted him on that,” he said. “I’ve also always lived by ‘do the right thing no

matter who is watching,’ because you will never get in trouble by doing the right thing.”

Over the years, he’s seen a lot of changes. For instance, the candy industry has become much more complex, but there is much more data to help in today’s world, he noted.

“There is so much data now that we didn’t have when I first started, and there are so many more companies, competitors and consolidations as well,” he said, adding that the teams he is part of today are reflective of the changes taking place. Working with those teams and the sales leaders in his organization is one of his favorite parts of his current role.

He also loves interacting with all the convenience retailers in the industry — and especially building relationships with people he would now consider “lifelong friends.”

“I look out and see the young talent coming up not only in our organization, but also in the convenience store industry, and the diversity of talent is exciting because I know the industry and our candy category is in great hands,” he said. CSN

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© Mondelēz International group

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FEATURE 2022

RISING TO THE CHALLENGE The nation’s top c-store wholesalers are helping retailers overcome today’s obstacles

By Linda Lisanti

JUST LIKE THE RETAILERS they serve, the nation’s convenience channel wholesalers are feeling the effects of the ongoing labor shortage, including a short supply of qualified truck drivers, as well as having to overcome the impacts of national economic issues and inflation.

Despite these major challenges, the largest wholesalers serving the U.S. convenience store industry are rolling out new and improved services to keep pace with the increasing demands of the channel’s retailers — as they try to keep pace with the increasing demands of customers.

According to the findings of the 2022 Convenience Store News Top Wholesalers Report survey, supply chain issues driven by the ongoing labor shortage continue to plague the industry. When asked what new services or business solutions they’ve added in the past year to help their clients, respondents indicated that they’ve introduced new online and mobile ordering solutions, new in-store inventory solutions, and product replacement programs for items in short supply.

Some wholesalers did report that they’ve had to rationalize SKUs due to supply chain issues. However, at the same time, they are branching out into new categories such as better-for-you products, specialty items and product lines previously sold through DSD distribution.

Convenience channel wholesalers are rolling out new and improved services, and branching out into new product categories.

Tobacco continues to be the largest revenue-generating category for the convenience channel’s top wholesalers.

According to this year’s survey conducted by CSNews, cigarettes account for 69.3 percent of total sales, while other tobacco products represent 12 percent.

Top Wholesalers Summary TOTAL SALES (Percent change vs. year ago):

Top 15 wholesalers

$89.0 billion (+25.5%)

Top 5 wholesalers

$81.2 billion (+27.8%)

AVERAGE SALES PER:

Company

$5,268 billion

Warehouse

$422 million

Percent of Sales

by Category Cigarettes

69.3%

Other tobacco products

12.0%

Foodservice

5.1%

Candy

4.7%

Salty snacks

2.9%

Grocery

2.5%

All other*

3.5%

*All other includes general merchandise, health & beauty care, fresh produce, CBD products, gourmet/natural/specialty food, and other.

Foodservice is a growing part of the business, representing more than 5 percent of sales. This is not surprising given the sheer number of c-store retailers that have introduced new prototype stores over the past year that put fresh food front and center.

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FEATURE 2022

Rank

Company/Headquarters

Latest FY1 (millions)

Previous FY (millions)

% change

1

McLane Co. Inc., Temple, Texas 2

$49,450

$46,840

5.6%

2

Performance Food Group, Richmond, Va. 3

$20,603

$5,947

246.4%

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

$5,500

Trading Area

50 states

Locations Served

Deliveries per Week

n/a

n/a

50,000

n/a

n/a

n/a

5,500

6,000

9,487

12,467

5,400

5,100

AR, AZ, CA, CO, FL, GA, IA, IL, IN, KY, MA, ME, MI, NC, NV, OH, OR, PA, TX, UT, WI, WA AL, AR, FL, GA, IA, IN, KY, LA,

3

$5,500

0.0%

MD, MI, MO, MS, NC, OH, PA, SC, TN, TX, VA, WV

4

Imperial Super Regional Distributor/S. Abraham & Sons Inc., Elmwood, La. 4

5

National Convenience Distributors, Farmingdale, N.Y.

6

AMCON Distributing Co., Omaha, Neb. 6

AL, AR, GA, IL, IN, KS, KY, LA,

$2,828

$2,400

17.8%

MI, MO, MS, NC, NE, OH, OK, PA, SC, TN, TX, WI, WV

5

$2,787

$2,806

-0.7%

CT, DC, DE, MA, MD, ME, NH, NJ, NY, PA, RI, VA, VT AR, CO, DE, FL, GA, IA, ID, IL,

$2,353

$2,310

1.9%

IN, KS, KY, MD, MN, MO, MT, NC, ND, NE, NM, OH, OK, PA, SD, TN, TX, UT, VA, WV, WY

7

GSC Enterprises Inc., Sulphur Springs, Texas

$973

$973

0.0%

AL, AR, FL, GA, KS, LA, MO, MS, NE, NM, OK, TX

n/a

n/a

8

Southco Distributing Co., Goldsboro, N.C.

$889

$822

8.2%

GA, NC, SC, TN, VA

1,300

1,700

9

Cooper-Booth Wholesale Co., Mountville, Pa.

$860

$740

16.2%

DE, MD, NJ, PA, VA, WV

1,200

1,800

10

Chambers & Owen Inc., Janesville, Wis.

$605

$600

0.8%

IA, IL, MI, MN, WI

1,100

1,300

11

Harbor Wholesale Foods, Lacey, Wash.

$575

$575

0.0%

AK, CA, ID, OR, WA

n/a

n/a

12

Capitol Distributing, Caldwell, Idaho 7

$452

$363

24.3%

AZ, CA, ID, NV, OR, UT, WA

n/a

n/a

13

Topicz, Cincinnati 8

$450

$438

2.7%

IN, KY, OH, WV

1,000

1,200

14

Tripifoods Inc., Buffalo, N.Y.

$345

$332

3.9%

IN, NY, OH, PA, WV

1,350

900

15

Resnick Distributors, New Brunswick, N.J. 9

$311

$267

15.6%

NJ, NY, PA

900

900

Footnotes: 1

FY = Fiscal year These results are from the latest 10-K of Berkshire Hathaway (McLane's corporate parent). Sales include convenience, grocery and foodservice operations. McLane declined to participate in this year's report.

3 These results are from the latest 10-K of Performance Food Group, which completed the acquisition of Core-Mark in September 2021. The increase in sales was driven primarily by this acquisition.

4 Imperial Trading Co. is the parent company of Imperial Super Regional Distributor/S Abraham & Sons Inc. 2

5 Century Distributors of Rockville, Md., was acquired by National Convenience Distributors.

6 In May 2022, AMCON Distributing Co. acquired majority control of Team Sledd LLC. The financial results included here reflect the pro-forma combination of the companies.

7 TCD Distributing of Boise, Idaho, was acquired by Capitol Distributing.

8 Novelart Manufacturing Co. is the parent company of Topicz.

9 Plainfield Tobacco and Candy Co. is the parent company of Resnick Distributors.

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ATTRACTING MORE C-STORE CUSTOMERS WITH COFFEE With challenging headwinds such as inflation hitting it’s highest level in 40 years, C-Stores must implement upgraded solutions for higher profitability. With limited resources and time, consumers are now more selective of their in-store purchases. They are not only looking for high-quality and convenience, but they are also more spending conscious. What if there was a way to upgrade and build excitement around your beverage program while meeting consumer expectations?

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To meet the need, the channel’s top wholesalers are expanding their foodservice offerings. When asked what kinds of offerings were added in the past year, respondents cited proprietary fried chicken programs, proprietary pizza programs, proprietary fresh sandwich programs, more finger-food offerings, and more protein and bread offerings for build-your-own sandwich programs.

The 15 largest wholesalers serving the U.S. convenience store industry generated combined sales of $89 billion this year, with sales per company averaging roughly $5.3 billion.

A focus on proprietary items is being seen in other product categories as well. Along with foodservice, respondents who said they’ve expanded their private label business in the past year cited peg candy, snacks and baked goods as other areas of private label development.

Another burgeoning area of innovation among c-store industry wholesalers is technology tools and solutions to better support their clients. Reflecting on the past year, respondents said they’ve enhanced their offerings by upgrading mobile apps and websites, introducing new ordering technologies and planogram management tools, updating software, improving manufacturer rebate tracking and developing custom apps to improve customers’ operations. On the drawing board for 2023 are digital signage offerings and custom marketing opportunities.

Making Headlines The 15 largest wholesalers serving the U.S. convenience store industry generated combined sales of $89 billion

this year, with sales per company averaging roughly $5.3 billion.

Several of the convenience channel’s top wholesalers made headlines in 2022: • Performance Food Group (PFG) announced the alignment of its convenience business under the Core-Mark brand. The decision came one year after PFG completed its acquisition of Core-Mark Holding Co. Inc., which followed its purchase of Eby-Brown Co. LLC in 2019. The newly combined Core-Mark now services more than 50,000 customers through 39 distribution centers across the United States and Canada.

• McLane Co. Inc., the c-store industry’s largest wholesaler, unveiled updates to its Mobile Virtual Trade Show (VTS) ordering app. The changes include an improved user experience and enhanced ordering capabilities that make multistore ordering easier. Launched in 2018, Mobile VTS lets retailers scroll through products and review detailed listings; provides easy-to-order summaries; and adds new items that are part of the best deals offered to the retail community on a weekly basis.

• S. Abraham & Sons Inc. (SAS) hosted its 36th Annual Vendor Exhibit & Trade Show in a hybrid format this year to accommodate both in-person and online ordering. Retailers had a six-week buying opportunity, running from Jan. 24 to March 6, to place orders on its portal. During the hybrid show, SAS showcased new and innovative opportunities for c-store retailers, including several plant-based frozen and shelf stable grocery selections for consumers looking to take up a vegan, vegetarian or flexitarian lifestyle and consume fewer meat products.

• Harbor Wholesale Foods acquired the brand and intellectual property of Skippers Seafood & Chowder from Starway Restaurants LLC. In assuming the rights to the 52-year-old brand, Harbor will support Skippers’ five remaining retail locations, online retail business and 128 quick-serve restaurants found in convenience and grocery stores throughout the Northwest. CSN

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

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FOODSERVICE

Kum & Go launched its first-ever food truck in Des Moines, Iowa, to promote trial and sales around its new menu.

Next-Level Foodservice Marketing Whether it’s a brand-new program or new items, c-stores need to get creative in marketing foodservice to grow profits and increase sales in this high-margin category

By Tammy Mastroberte

one of the highest margin offerings in a convenience store, and today’s c-store retailers continue to step up their game to compete with quickservice restaurants (QSRs), fast casual, casual dining and other retailers that offer food to consumers. But it’s not enough to just offer high-quality food options in the store in order to succeed in foodservice.

Customers need to know it’s there, and then take the plunge to try it — especially with new items.

FOODSERVICE IS STILL

“It’s about upping your game on your food offering and then making your value proposition known to your demographic,” said Patrick Nycz, founding president of NewPoint Marketing, based in West Lafayette, Ind. Citing menu innovation as one of the hottest trends right now, he noted that c-stores should be creating items in line with the demographics they serve.

“Make sure whatever you have aligns with your target audience based on location because that has a lot to do with what people are buying,” Nycz advised.

All marketing — no matter the industry — starts with awareness. For instance, when competing with Dunkin’ or Starbucks for the morning customer, people need to know that what a c-store offers is just as good, and then be willing to buy it, said Noor Abdel-Samed, partner and managing director of L.E.K. Consulting, based in Boston.

“The biggest hurdle is getting people to break from their regular routine of breakfast or dinner and try your location,” he said, explaining that one advantage c-stores have over other industries is that customers can get additional items while they are there — items not available at their local Dunkin’ or Starbucks.

Established customers should be incentivized to try a food item. For example, a chain could run a promotion where every time a customer spends $10 in the store, they can pick any food item up to $5 to try. “It’s about

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FOODSERVICE

Kum & Go's "Happy Food/Sad Food" campaign runs in all markets that currently feature the chain's new food program.

awareness and then trial of the offering,” Abdel-Samed said. “If someone is there, get them to try something.”

New Ways to Market In addition to traditional media advertising via television, radio, billboards — and today on streaming channels like Hulu for those who don’t pay for ad-free content — c-store retailers are also looking for and testing innovative ways to get the word out about their food offerings.

In October 2022, Wawa Inc., a chain of 900-plus stores, signed a sponsorship deal for a multiyear partnership with four universities in Florida, making it the official hoagie of their football teams and other athletics. Additionally, Whitehouse Station, N.J.-based QuickChek, operating more than 150 stores, announced a NASCAR partnership with Petty GMS to promote the “Best Damn Sandwich in Town” with a No. 42 QuickChek Chevrolet.

Des Moines, Iowa-based Kum & Go LC, operator of more than 400 convenience stores, also leveraged a sports partnership to promote its foodservice items, joining with the University of Iowa’s Hawkeye secondary football team, nicknamed Doughboyz, to launch an exclusive T-shirt line for fans. On the Thursday following every game of the season, the chain also offered $1 off whole pizzas at its Iowa stores for each interception made.

“This partnership was a great first step in the college athletics space and holds us true to our Iowa roots and Krause family history with the University of Iowa,” said

Taylor Boland, director of communications for Kum & Go, which is owned by the Krause Group.

While the retailer utilizes traditional media including television, radio and billboards to run its “Happy Food/Sad Food” campaign in all markets currently featuring its new food program, Kum & Go continues to think of new ways to promote its offerings as well.

The company launched its first-ever food truck in Des Moines “to help promote sales and the trial of the food,” according to Boland, and it wrapped tankers of sister company Solar Transport in graphics that promote the new food program and its “Real, Fast, Fresh Eats” tagline.

“We will continue to explore creative tactics as we roll the food program out to our remaining markets in the coming years,” Boland explained. The offering of made-to-order grain bowls, premium sandwiches on fresh-baked bread and blended smoothies launched in and around Little Rock, Ark., in 2021 and has since expanded in availability and menu variety.

Store signage is also key when it comes to foodservice items, whether it’s blown-up images or video displays showcasing the food items in an appetizing way. Kum & Go refreshed all of its in-store signage to reflect its new food program.

“Packaging will continue to brand a chain when it becomes garbage on the street or debris in the trash. Don’t disregard packaging because that is promotion for your product.”

— Ernest Harker, Ernburn

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Investing in good photography is very important when it comes to foodservice, according to Ernest Harker, founder of Ernburn, a retail consulting firm based in Draper, Utah, and the former head of marketing at Salt Lake City-based Maverik — Adventure’s First Stop.

“A high-quality photo of a beautiful product tells the customer, ‘We care enough about our product to show it in its best light.’ It’s subliminal,” he said. “A chain like Carl’s Jr. will spend the money on a food stylist and professional photography, and this is something c-stores need to be considering.”

Another best practice c-stores can take from their QSR competitors is branded packaging for foodservice items. Rather than simple white packaging or sandwich wrapping, Harker recommends printed options with the store or foodservice brand on it.

“QSRs highly value their product packages and brand their food containers so they are highly recognizable. Packaging will continue to brand a chain when it becomes garbage on the street or debris in the trash,” he said. “Don’t disregard packaging because that is promotion for your product.”

While he acknowledges that it’s less expensive for a smaller chain to wrap items in white paper and post a QR code on it, they can choose the option of a branded sticker and still keep costs low.

“It’s a marketing and a branding investment, and it tells the world you are proud enough of your products that you put your name on it,” he stressed.

Leaning on Loyalty While loyalty programs are known to boost sales and bring customers into the store, one of the biggest advantages to a retailer is gathering the member data to use for marketing purposes — especially personalized marketing.

“If you have someone coming in for other things, and they are already a good customer, personalized marketing can get them into a new category like foodservice,” said Abdel-Samed. “Offer them a free breakfast sandwich or a coffee to try.”

Companies spend money on ads and billboards, but filtering marketing dollars into free samples can be an effective way

“If you have someone coming in for other things, and they are already a good customer, personalized marketing can get them into a new category like foodservice.”

— Noor Abdel-Samed, L.E.K. Consulting

to incentivize trial and get already established foodservice customers to try another daypart, according to Harker.

“If they come in for a breakfast burrito and coffee, but go to Burger King for lunch, how can we get them to come back to us?” he posed.

“Use the loyalty data to find the top foodservice products in each category and offer them as free samples to loyalty members, cross referenced with items they have already purchased, Now, when a store purchases a billboard ad, it can say, ‘Download our loyalty platform and get free food.’”

Harker recommends picking five different items to offer as freebies and tracking them to see how many repeat purchases come from each over time. Since employees are making these items already, retailers don’t have to count labor when factoring their return on investment.

“Four years ago, loyalty programs were not as sophisticated as they are today, and what I’m talking about is doable on most platforms in some way,” he added.

Another option is to combine food items with manufacturer promotional offers, such as a deal on a snack or beverage, to create a bundle. Harker suggests retailers ask the manufacturer if they can offer a deeper discount with the purchase of a house product.

“Instead of 50 cents off a bag of chips or a soda, you could offer $1 off with the purchase of a food item,” he said.

Kum & Go uses its &Rewards program to communicate with customers about its foodservice items, as well as its mobile app, where customers can order food or in-store products. “We’re also engaging with our &Rewards members through email and push notifications, local targeting and retargeting upon seeing intent to try or purchase,” Boland said.

The key with any type of marketing, including foodservice items, is to set a budget, create a schedule, and remain consistent, said Nycz. Even for a smaller chain working with a less robust budget, consistency is key.

“Marketing is a process. You have to set it and be consistent. Don’t do a contest and then do nothing for two months. Even if you don’t have a big budget and have to do promotions less often, you can still be creative and consistent,” he said. CSN DE CE MBE R

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TOBACCO

Inflation Bears Down on the Backbar How can convenience store operators cater to cash-strapped tobacco customers?

By Renée M. Covino

punch of inflationary pressures and lower discretionary income is behind the tobacco category’s latest cautionary tale.

THE ONE-TWO

Especially for convenience store customers, inflation has been most acutely felt at the pump, according to Don Stuart, managing director of Cadent Consulting Group in Wilton, Conn. “With dramatically higher gasoline prices vs. a year ago, consumers are feeling the pain, resulting in less frequent trips or fewer trips into the store to buy merchandise and tobacco products,” he explained.

In Goldman Sachs’ latest Nicotine Nuggets survey, which reported on the third quarter of 2022, retailers and wholesalers expressed increased concern about inflation and elevated gas prices driving declines and downtrading activity in the nicotine business.

“Cigarette volume declines, accelerated in the third quarter, reflect ongoing pressure

on the consumer from broader inflation and frequent manufacturer price hikes, which is driving reduced tobacco purchase frequency and increased poly-usage/ shift to alternatives,” stated Bonnie Herzog, managing director at Goldman Sachs.

Onward & Downward Herzog noted that downtrading pressure remained high in the third quarter, with more than 70 percent of retail/wholesale respondents flagging it as a response to elevated gas prices. It’s led to a significant increase in market share of fourth tier/discount brands.

“Tobacco consumers are trading down to fourth tier and deep discount brands as inflation continues to creep in,” agreed Ernie Teague, vice president of sales and marketing at Cheyenne International, maker of filtered cigars, cigarettes, moist snuff and pipe tobacco. “More consumers are also discovering that quality products can come at a lower cost.”

Stuart identified four typical downtrading scenarios happening in the category now: • From premium brand/name brand cigarettes to second tier, third tier and fourth tier cigarettes;

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• From cigarettes to roll-your-own (RYO) tobacco and papers; • From cigarettes to little cigars; and • From cigarettes to reduced-risk options, including e-cigarettes and heat-not-burn tobacco products.

“Within tobacco, trade-down is a very real risk now,” he said. “Other tobacco products [OTP] are also coming to the forefront for both reduced-risk and price/value reasons.”

Management Science Associates Inc. (MSA), a Pittsburgh-based company focused on analytics and informatics, has been tracking a trend whereby the deep discount cigarette segment is growing despite declines in the other cigarette price tiers. Don Burke, MSA’s senior vice president, noted that this trend has spread to include the moist smokeless segment, where “the lowest-priced products are growing despite small declines in the remainder of the category.”

The Top Changes in Consumer Purchase Behavior Elevated gas prices remain a concern for the tobacco industry given the “disproportionate drag” they have on the disposable income of price-sensitive tobacco consumers, Goldman Sachs reported in its latest Nicotine Nuggets survey. Coupled with broader inflation and frequent manufacturer price increases, retailers and wholesalers are seeing a range of changes in consumer purchase behavior.

The top five changes reported are: 1. A negative impact on cigarette volumes; 2. Downtrading within cigarettes; 3. Downtrading away from the cigarettes category to more affordable, noncombustible options such as e-cigarettes and modern oral nicotine; 4. A shift to single packs vs. cartons; and 5. Fewer cigarette purchases per trip.

Some survey respondents did indicate that strong promotional and loyalty offers, such as multipack promotions, are preventing downtrading to some extent.

Critical Response What can c-stores do to cater to cashstrapped customers and preserve their tobacco/nicotine business?

“This trend will only accelerate with the continued high rate of inflation,” he reasoned.

Teague told Convenience Store News that it’s more critical than ever for retailers to maintain a good mix of products, and develop good working relationships with reputable manufacturers across all subcategories — premium, discount and deep discount.

Like Stuart, MSA’s Burke expects downtrading and RYO trends to only increase given the current rate of inflation and higher gasoline prices. He’s also observed a resurgence in an old-fashioned tobacco item: pipe tobacco. “As a direct result of the current economic conditions, pipe tobacco — a product form often used to make your own cigarettes — is showing signs of growth despite several years of decline,” he said.

“There is real value in price-value products right now and it’s important c-stores support these brands with signage and correct pricing,” he added.

His advice to retailers is to make it easy for customers to locate value products. “The convenience retailer should use signage and shelf tags to highlight the low-priced products in each category to capitalize on the current consumer purchase behavior,” he advised.

The way Stuart sees it, smart retailers will place more price-attractive OTP products in the forefront for checkout merchandising. He specifically highlighted RYO.

C-store retailers also should consider highlighting the modern oral and vapor categories, according to Burke, not only for increased store visibility, but also to ensure their product assortment is keeping up with consumer demand.

“Placement of RYO tobacco and other alternatives with clear price markings and comparisons per stick/use can help address the needs of cash-strapped customers,” he advised. “The leading RYO brands, including Top and Bugler, should benefit from a trade-down resurgence, while more premium brands of RYO will also benefit.”

“The nicotine categories experiencing growth in the current economy include vapor and the new nicotine pouch products, otherwise known as the modern oral category,” he said. “Interestingly, these nicotine categories typically provide nicotine at a more economical level than other nicotine products.”

While it’s true the taxation differential between cigarettes and OTP has narrowed over the past decade, Stuart pointed out that it is still clearly less expensive to buy RYO or switch to off-brand alternatives.

“Today, when most consumers are back in the workplace, the vapor and modern oral categories are meeting the dual consumer needs of providing a product that can often be consumed where other tobacco products are prohibited, and typically provide an economical purchase choice,” Burke explained. CSN

Over the last few years, MSA has found that consumers are gravitating to the more economical product forms to consume nicotine, including small cigars and RYO items.

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TECHNOLOGY

Amazon's Ian Rasmussen (left) and CSNews' Don Longo (right) presented the Technology Leader of the Year award to Travis Sheetz.

Technology Takes a Seat at the Table Industry leaders talk all things innovation at the 2022 Convenience Store News Technology Leadership Roundtable

By Melissa Kress

from across the convenience channel gathered to discuss the industry’s digital transformation, share insights on the latest technology trends and communicate pain points at the 2022 Convenience Store News Technology Leadership Roundtable, held Oct. 1 in Las Vegas.

TECHNOLOGY EXECUTIVES

As part of the annual event, guests also honored one of their own, Sheetz Inc. CEO Travis Sheetz, as he accepted the CSNews Technology Leader of the Year award on behalf of the company. Ian Rasmussen, head of U.S. business development, enterprise convenience for Just Walk Out Technology by Amazon, presented the award which recognizes a technology leader that not only contributes to the success of their organization, but also to the advancement and growth of the convenience store industry as a whole.

Altoona, Pa.-based Sheetz, operator of more than 640 convenience stores throughout Pennsylvania, West Virginia, Virginia, Maryland, Ohio and North Carolina, changed how it thought about technology a few years ago by making the decision to move the service outside of its IT group. The retailer now approaches technology as an added value for the business and not just an internal service.

“Things have really changed,” Travis Sheetz said upon

accepting the award. “When we talk about convenience, how can we not talk about technology?”

The Transformation Journey The Technology Leadership Roundtable also welcomed leaders from TravelCenters of America Inc. (TA), who spoke about the company’s transformation journey. The travel center operator embarked on this journey in early 2020, and technology sits firmly behind many of the key changes being made throughout the organization.

However, as Senior Vice President and Chief Information Officer Sandy Rapp noted, the evolution is not just about technology, but the business as a whole. “It is always: What are we doing for the business?” she explained.

“Technology is a piece of the transformation.”

At the core of this mindset is embracing new ideas within the framework of an established 50-year-old business. “It is not just about replacing technology. We are challenging ourselves to reimagine technology,” said Rapp, who joined TA a little more than two years ago.

The first year's of TA's transformation journey began with planning and preparation. The second year focused on investing in growth.

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In 2022-2023, TA is concentrating on resilience and growth.

From an IT standpoint, the company has compiled a planning list of roughly 130 items, many of them in the remedial column. The changes around technology are crafted around two key questions: Where does the company centralize things, and where does it unify things? As Rapp noted, technology needs to be seamless across the organization.

Key to the success of this project is staying aligned and focused on priorities, she said. Every department at TA has its own initiatives. And at the heart of this transformation journey is the guest — both the professional driver and the everyday motorist. However, their needs are not necessarily the same. “Who do we want to serve? Both,” Rapp said.

Among the company’s IT accomplishments to date are a 10 percent adoption rate for self-checkout, a 51 percent adoption rate for mobile loyalty point redemption, and a 50 percent reduction in downtime due to site infrastructure refreshes.

As TA takes steps to position itself for success in its next 50 years, the company is developing several partnerships to take its operations to the next level.

On the technology front, this includes collaborations with Xendee, an energy system platform; Nikola, a designer and manufacturer of heavy-duty commercial battery-electric and fuel cell electric vehicles, and energy supply and infrastructure solutions; DataRobot, a next-generation artificial intelligence company; and Daugherty Business Solutions, an advisory services and technology consulting firm.

Leaders from TravelCenters of America discussed the retailer's digital transformation journey over the past two years.

Westlake, Ohio-based TA is the largest publicly traded travel center business in the United States, operating principally under the TA, Petro Stopping Centers and TA Express banners. Its network totals 280 locations, which sold roughly 2.3 billion gallons of fuel in 2021. The retailer also has 450-plus quick-service restaurants and more than 150 full-service restaurants.

Technology Trends

“When we talk about convenience, how can we not talk about technology?”

— Travis Sheetz, Sheetz Inc. TA is also addressing the changing mobility landscape.

With locations on large parcels along interstate highways, the company is in a unique position to be a leader in energy transformation, according to Sharon Foster, TA’s senior director of marketing.

“What is our energy offer, and how do we develop the guest experience regardless of their method of mobility?

We need to be adaptable,” Foster said.

TA is not the only industry player thinking about the changing mobility landscape. During an open discussion on technology trends, attendees spoke about the shift to electric vehicles (EVs) and the issues coming to light in the channel — for instance, how do you control the customer experience? The group agreed that it takes a lot to make the EV charging experience work.

Other top-of-mind trends are loyalty programs, disruptions in the supply chain, prioritizing technology dollars, the rise of omnichannel, frictionless convenience, workforce management, labor challenges, working with legacy equipment, and mobile payments.

And when asked what keeps them up at night, the unanimous answer was data security.

The 2022 Convenience Store News Technology Leadership Roundtable was sponsored by Invenco, Just Walk Out Technology by Amazon, PayiQ (formerly LedgerPay) and RELEX Solutions. CSN DE CE MBE R

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STORE SPOTLIGHT

Taking Flight Formerly known as Liberty Travel Plazas, the new Onvo brand aims to provide guests with a fun, friendly and memorable experience

By Danielle Romano

At a Glance Onvo Opened: August 2022 Location: 7018 Blue Ridge Trail, Mountain Top, Pa. Size: 7,200 square feet Unique features: Onvo’s flagship location; an updated store design boasting a fun and energetic aesthetic in a sleek and modern store atmosphere; bean-to-cup coffee machines; a full-size Burger King with a drive-thru; Onvo-branded merchandise; Sunoco fuel

THE STORY OF ONVO began more than 30 years ago with a truck stop outside of Scranton, Pa., in a town called Tunkhannock. Formerly known as Liberty Travel Plazas, the company developed into a hospitality enterprise that today serves traveling motorists through a network of businesses, including 36 travel plazas and gas stations, 24 quick-service and fullservice restaurants, petroleum distribution, and six hotels across Pennsylvania and upstate New York.

Over the years, company executives felt that as the network expanded, the name Liberty no longer encompassed all of the things for which it wanted to be known. They wanted to update the brand to something that reflected its dedication to providing guests with a friendly and memorable experience.

After a year of conceptualization and development, the Onvo brand was born.

“The name Onvo was developed during a brainstorming meeting with the company leadership. During an exercise,

we came up with a list of words related to travel. Among those was the word ‘convoy.’ Since we serve truckers as well as four-wheeled traffic, we felt a strong affinity to the word convoy, so after some playing around with some of the letters in the word, we landed on Onvo,” Harman Aulakh, marketing manager, told Convenience Store News. “We felt that as a name, Onvo represented the fun and friendly environment we like to cultivate in our stores.”

The first location to debut the Onvo identity was a remodeled travel plaza in Lake Ariel, Pa., in June 2021. Recently, the company unveiled a flagship Onvo travel center in Dorrance Township, Pa. Making its debut in August 2022, this site marked the first ground-up construction of the new store prototype, and also the company’s first travel center in Luzerne County.

Located off Exit 155 on Interstate 8, the 7,200-square-foot Onvo travel center features an array of products and services, including:

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STORE SPOTLIGHT

• Six bean-to-cup coffee machines; • F’real milkshakes and other frozen and cold dispensed beverages; • The Beer Barn, a walk-in beer cooler; • A prominently featured local products section; • A full-size Burger King restaurant with a drive-thru; • Onvo-branded merchandise; • Two showers; and • Sunoco-branded fuel and truck diesel.

This location will also be home to Onvo’s first electric vehicle charging units. The Dorrance Township travel plaza will feature two DC fast charging stations as part of Pennsylvania’s Driving PA Forward program. They are slated to go live in mid-December.

Bridging the Past & Present An updated store design is just one of multiple elements that make up the new identity and branding. The aesthetic of Onvo is fun and energetic, while maintaining a sleek and modern store atmosphere.

Bright oranges, bold blues and energetic yellows punctuate the stores and bring a sense of playfulness, which is also incorporated with the use of a new mascot, Onvo the Owl. “Onvo takes pride in our northeastern Pennsylvania roots, and we try to find ways to incorporate the imagery of the area into our design by pulling in elements that call back to the outdoors,” Aulakh said. “When we were known as Liberty, our aesthetic relied more on that sense of locality, and we wanted to find a way to maintain some of that local connection with the Onvo brand.”

As part of the rebrand, the company went live with a new loyalty program, Onvo Rewards. Designed in conjunction with Paytronix, the program launched in December 2021 alongside a new Onvo mobile app, available on both Apple and Android devices.

Members of Onvo Rewards can earn points, known as Hoots, for each in-store purchase they make. Hoots can be redeemed for rewards such as free food, drinks, snacks or fuel discounts.

Onvo focuses on providing guests with a friendly and memorable experience.

All customers who register for Onvo Rewards receive a welcome reward of 10 cents off per gallon of gas, up to 20 gallons, every time they fill up during their first month of membership. Additional program perks include referral rewards, birthday and anniversary rewards, and buy-five,

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“Onvo takes pride in our northeastern Pennsylvania roots, and we try to find ways to incorporate the imagery of the area into our design by pulling in elements that call back to the outdoors.”

— Harman Aulakh, Onvo

get-one-free club programs for coffee, roller grill items and fountain drinks.

Onvo Rewards members can choose whether to use a physical card, a virtual card on the app or their phone number to collect their Hoots.

“Onvo Rewards is an exciting new chapter for our company. The decision to launch a new loyalty program came from the desire to reward our most loyal customers with added benefits, while giving them an easy way to interface with their rewards,” said Aulakh. “Onvo Rewards and the new Onvo app really provide customers with an intuitive and fun way to interact with their rewards program and with the brand as a whole.”

Onvo serves both truckers and four-wheel motorists with a variety of amenities.

Flying Into the Future Since the rebrand, Onvo has put a lot of effort into connecting with the communities it serves and travelers alike, with an emphasis on advertising via digital channels such as email and social media, as well as through traditional marketing like fun and creative billboard campaigns.

All 36 of the company’s travel plazas and gas stations have or will receive some level of remodeling or reimaging. The extent of the reimaging will vary on a store-by-store basis. Rebranding projects are expected to be completed by mid-2023.

Onvo is also expanding and focused on growing its footprint both at home in northeastern Pennsylvania and in other territories, Aulakh said. Since rebranding, the business has extended further into New York, adding two travel plazas in the greater Albany area. CSN DE CE MB E R

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HOT PRODUCTS SPECIAL ADVERTISING SECTION

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INSIDE THE CONSUMER MIND

The Health of Convenience Stores Six in 10 c-store shoppers are not satisfied with the current selection of better-for-you products Emerging from the worst of the COVID-19 pandemic, many Americans were focused on shedding the pounds they put on while spending much more time at home. Now, it appears consumers are interested in finding more of a balance between food and beverages that contribute to their physical wellbeing and those that serve more emotional needs. The 2022 Convenience Store News Realities of the Aisle Study, which surveyed 1,500-plus consumers who shop a c-store at least once a month, uncovered the following insights:

62%

of convenience store shoppers agree with the statement: “I am health conscious.”

This figure is down compared to last year when 65% said they were health conscious.

What aspects of better-for-you food and beverages are you most concerned or interested in?

Fresh continues to lead the list of concerns/interest for health-conscious shoppers.

Fresh 39% Sugar 26% All-natural 26% Protein 25%

Product attributes that saw a rise in concern/ interest year over year are all natural, locally sourced/produced, clean label, antibiotics and artificial flavors.

Calories 23% Ingredients I can understand and pronounce 21% Sodium 17% Carbohydrates 15% Caffeine 15% Fat 14%

Satisfaction with Selection of Healthy/Better-For-You Foods at Convenience Stores

Locally sourced/produced 14%

40%

Extremely/very satisfied

Non-processed 13%

45%

Somewhat satisfied

Non-GMO 12%

15%

Not very/not at all satisfied

Artificial sweeteners 11% Clean label 11% Antibiotics 10% Artificial flavors 9% Functional/vitamin-enhanced 8% Growth hormones 8% Vegan/plant-based 6% Gluten 5%

Among those c-store shoppers who say they’re health conscious, 60% see room for improvement in the current selection of healthy food and beverages available at convenience stores.

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