CSNC - Jan/Feb 2020 by ensembleiq

NATIONAL SHOPPER STUDY and more... Meat snack attack

JANUARY/FEBRUARY 2020 CCentral.ca @CSNC_Octane PM42940023

Plain packaging Q&A

JANUARY/ FEBRUARY 2020

Volume 3 | Number 1

CONTENTS

NATIONAL SHOPPER STUDY

05 Editor’s Message New year, new insights, new opportunities 06 The Buzz People, places, news and events 08 Quick Bites Consumers thirsty for better-for-you beverages 10 EVENT PREVIEW The Convenience U CARWACS Show Toronto

17 Beverage vendors tackle sustainability JANUARY/DECEMBER 2020 CCentral.ca @CSNC_Octane PM42940023

Plain packaging Q&A

Retailer Spotlight Success is in the extras at Caledon Esso

COVER STORY Defining Convenience C-store IQ: National Shopper Study

Ask the Expert Plain packaging: Norman Pridgeon, JTI-Macdonald Corp.

Snapshot Micro-markets, major appeal

By the Numbers Industry highlights

Category Check Meat of the matter

ADVERTISERS

28 Backtalk Wayne Barker, Danone Canada Convenience U CARWACS Show..........................11 ITWAL Ltd............................................................... 27 Mondelez Canada Inc.............................................15 National Smokeless Tobacco Company................4 Regal Confections...............................................2, 19 Star Women in Convenience.................................16 Tokai of Canada, Ltd..............................................23

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EDITOR’S MESSAGE

20 Eglinton Ave. West, Suite 1800, Toronto, ON M4R 1K8 (416) 256-9908 | (877) 687-7321 | Fax (888) 889-9522 www.CCentral.ca GROUP BRAND DIRECTOR - CONVENIENCE Kathryn Swan | kswan@ensembleiq.com EDITORIAL EDITOR, CSNC Michelle Warren | mwarren@ensembleiq.com EDITOR, OCTANE Kelly Gray | kgray@ensembleiq.com TRANSLATION | Danielle Hart ADVERTISING SALES SR BUSINESS DEVELOPMENT MANAGER Chantal Barlow | cbarlow@ensembleiq.com NATIONAL ACCOUNT MANAGER Elijah Hoffman | ehoffman@ensembleiq.com SALES & EVENTS COORDINATOR Claudia Castro DESIGN AND PRODUCTION VICE PRESIDENT, PRODUCTION Derek Estey | destey@ensembleiq.com DIRECTOR OF PRODUCTION Michael Kimpton | mkimpton@ensembleiq.com ART DIRECTOR | Linda Rapini DIRECTOR OF MARKETING Alexandra Voulu | avoulu@ensembleiq.com SENIOR DIRECTOR AUDIENCE STRATEGY Lina Trunina | ltrunina@ensembleiq.com WEB OPERATIONS MANAGER Valerie White | vwhite@ensembleiq.com CORPORATE OFFICERS CHIEF EXECUTIVE OFFICER | Jennifer Litterick CHIEF FINANCIAL OFFICER | Jane Volland

CHIEF INNOVATION OFFICER | Tanner Van Dusen CHIEF HUMAN RESOURCES OFFICER | Ann Jadown EXECUTIVE VICE PRESIDENT, EVENTS & CONFERENCES Ed Several

SUBSCRIPTION SERVICES Subscriptions: $65.00 per year, 2 year $120.00, Outside Canada $100.00 per year, Single copy $12.00, Groups $46.00, Outside Canada Single copy $16.00. Email: csnc@ccentral.ca Phone: 1-844-694-4422, between 9 a.m. to 5 p.m. EST weekdays Fax: 1-844-815-0700 / Online: www.ccentral.ca/subscribe LICENSING AND REPRINTS

Please contact Wright’s Media | ensembleiq@wrightsmedia.com 1-877-652-5295 CONVENIENCE STORE NEWS CANADA / OCTANE is published 6 times a year by EnsembleIQ. CONVENIENCE STORE NEWS CANADA / OCTANE is circulated to managers, buyers and professionals working in Canada’s convenience, gas and wash channel. Please direct inquiries to the editorial ofﬁces. Contributions of articles, photographs and industry information are welcome, but cannot be acknowledged or returned. ©2020 All rights reserved. No part of this publication may be reproduced in any form, including photocopying and electronic retrieval/retransmission, without the permission of the publisher.

New year, new insights, new opportunities

As the saying goes—“If you can’t measure it, you can’t improve it”— and that’s one of the reasons we’re so excited to share with you Convenience Store News Canada’s new proprietary research report, C-store IQ: National Shopper Study. C-store IQ is the first convenience and gas specific study that delves into the wants, needs, perspectives and habits of Canadian c-store shoppers. We worked with Canadian ViewPoint Inc. to survey more than 1,000 people across the country about all things convenience and gas—the results are fascinating. Our cover feature is the first in a year-long series of articles and reports digging into what matters most to your customers and, in turn, your business. With a steady decline in the number of c-stores across the country, a deep understanding of purchasers is more critical than ever for retailers who intend to survive and thrive in this competitive and ever-changing market. That’s what makes C-store IQ’s shopper data so valuable—it’s designed to measure how c-stores are responding to changing customer expectations, zero in on areas ripe for improvement and high-

light opportunities to achieve strategic market advantage. We’re happy to report that a quick stop at a convenience store is part of the fabric of daily life for most Canadians: 43% shop chain convenience stores and 38% visit independently-owned convenience stores at least once a week. The research shows Canadian c-store shoppers are loyal, tech-curious, hungry for healthy food options and always in a hurry. For more topline insights from this comprehensive study, read “Defining convenience” (p. 17). Plus, you won’t want to miss, “Success is in the extras” (p. 12), which details how new entrepreneurs, like c-store owner Karan Pansi, go above and beyond, redefining traditional convenience to respond to customers’ evolving wants and needs. It’s a new decade: Times are changing and so is the world of convenience. The good news is, Convenience Store News Canada is committed to bringing you valuable c-store shopper data, insights and best practices to help inform your decisions and measure success. Michelle Warren | Editor standard

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THE BUZZ

CROSS-CANADA ROUND-UP

PEOPLE, PLACES, NEWS AND EVENTS

CIRCLE K GOES BIG

Quebec-based retailer Alimentation Couche-Tard’s Circle K brand is one of only three c-store chains to rank among the 200 largest U.S.based franchisors, according to The Franchise Times Top 200+. Circle K landed at No. 14, while Irving, Texas-based 7-Eleven landed at No. 2; and La Palma, Calif.-based ampm, a division of BP, took the No. 83 spot.

BEER OF MISSING OUT

Grocery stores across New Brunswick are now selling beer and wine, however, the Atlantic Convenience Stores Association says its members are being short-changed by the recent move: President Mike Hammoud says while his group supports the expanded retailing of alcohol, the decision by NB Liquor creates an unfair advantage that will hurt convenience stores. The Convenience Industry Council of Canada agrees and is calling on the New Brunswick government to continue this momentum by levelling the playing field and allowing convenience stores the same right as grocery stores.

SEEING BROWN

Plain packaging is to be implemented February 7 at the retail level, with Tobacco Product Regulations (Plain and Standardized Appearance) calling for the use of drab dark brown colour on packs and prohibiting the use of any design elements, logos or product branding. According to Health Canada: “This colour (Pantone 448C) is the package colour selected by all countries that have implemented plain packaging measures for tobacco products. Health Canada also commissioned public opinion research (2016–17) that confirmed that the Canadian population findings were consistent with those for Australia whereby Pantone 448C, a drab dark brown, was considered to be an unappealing colour.”

THE LAST STRAW

Vancouver is phasing in a ban on plastic straws and plastic shopping bags. Plastic straws will be banned starting in April when, at the same time, businesses will be required to provide single-use utensils only when requested. Of note, businesses must provide bendable straws (upon request) to accommodate people with disabilities. In addition, a bylaw banning plastic shopping bags is to come into effect on Jan. 1, 2021: Businesses will be able to offer paper bags for 15 cents during the first year, then it will increase to 25 cents a bag. There will also be a 25-cent charge for disposable coffee cups.

Pantone 448C

PARKLAND TAKES CUSTOMERS ON A JOURNIE

Parkland Fuel Corporation is teaming up with CIBC for Journie, its nationwide rewards and customer loyalty program. Journie, which is supported by a new mobile app, launched in select markets in the fall and is now rolling out coast-to-coast across Parkland’s network of approximately 1,300 Chevron, Ultramar, Pioneer and Fas Gas sites. “The launch of our Journie Rewards program and CIBC’s participation is a major milestone for Parkland,” Ian White, SVP of strategic marketing and innovation, said in a release. “By connecting our national network of fuel retail sites and On the Run and Marché Express convenience stores under a single proprietary rewards program with compelling fuel and merchandise offers, we are creating a powerful customer loyalty offer with nationwide scale.”

| JANUARY/FEBRUARY 2020

FEE DROP

As a result of an agreement reached by the federal government with Visa and Mastercard, some of the fees merchants pay on credit card transactions will go down to, on average, 1.4% (from 1.5%) starting in April. In addition, small merchants stand to further benefit, as Prime Minister Justin Trudeau has promised to eliminate processing fees on HST and GST for credit card transactions, a move that would save merchants an estimated $500 million per year in fees.

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VAPING

UPDATE As of January 1st, the promotion of vaping products in convenience stores and gas stations is no longer permitted in Ontario. Meanwhile, British Columbia has a 10-point plan to take effect this spring that includes an ad ban, as well as cutting nicotine content in vape pods, restricting flavours aimed at young people, increasing taxes and requiring health warnings on packaging. Nova Scotia will ban sales of flavoured e-cigarettes and juices as of April 1, while Prince Edward Island is raising the legal age to buy tobacco and e-cigarettes from 19 to 21 (the highest age limit in the country) and banning certain flavours of e-cigarettes. Saskatchewan plans to bring vaping regulations in line with existing tobacco legislation, with new rules that restrict the sale of vaping products to people 18 and older and prohibit vaping ads in businesses frequented by young people: The use of vape products will also be restricted in and around public buildings. As of press time, the federal government is considering new rules that would prohibit vaping promotion in specialty shops, businesses and online platforms frequented by youth. “In the current highly politicized environment, governments appear to be losing sight of a key public policy objective: to transition adult smokers to reduced risk products,” says Anne Kothawala, president and CEO of the Convenience Industry Council of Canada. “Youth access to vaping products is a serious issue, which is why our industry has committed to working with governments across the country to implement measures that will actually address it…. Convenience stores have an excellent track record of selling age restricted products to adult consumers.” FOR THE LATEST NEWS AND INFORMATION ABOUT TOBACCO AND VAPING, SUBSCRIBE TO OUR BACK COUNTER NEWSLETTER.

THE BETTER WAY?

The Toronto Transit Commission has banned vaping ads on their property—including buses, subways, buildings and bus shelters—a move it says will bring it closer in line with provincial and federal regulations on the promotion of vaping. The move is meant “to reduce youth to the exposure to and the influence by vaping products promotion”—of its approximately 1.7 million daily customers, more than 10% are persons aged 18 or younger.

SUNCOR STARTS DIGITAL TRANSFORMATION

Suncor is embarking on a multiyear strategic alliance with Microsoft Canada as a part of the company’s effort to accelerate what it calls its “digital transformation journey.” Suncor will tap into the Microsoft’s full range cloud solutions to empower a connected and collaborative workforce, upgrade data centres, and increase analytics capabilities. Through this alliance, Suncor expects to improve the employee and customer experiences across their business, from front-line workers in industrial settings, to gas station attendants at Petro-Canada, to office workers.

SAVE THE DATES

MOVING ON UP Frank Scali is the new director, industry affairs, for Food & Consumer Products of Canada (FCPC). Scali joins FCPC from Nestlé Canada, where he spent 22 years in various supply chain roles. He has also served as chair of FCPC’s Supply Chain Council for the past three years. In his new role with FCPC, Scali will work to drive industry insights and providing members with opportunities for cost savings/efficiencies and improved service to retailers. Peter Allen is now vice-president and general manager for ITWAL Ltd. Allen joined ITWAL in 2007 and was promoted to vice-president in 2017. Allen “has very ably demonstrated... that he has the ability and attitude to effectively lead the company,” said president and CEO Ross Robertson.

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February 5-7, 2020 NACS Leadership Forum Miami Beach, FL www.convenience.org/ events/leadership/forum March 3-4, 2020 The Convenience U CARWACS Show Toronto www.convenienceu.ca

JANUARY/FEBRUARY 2020

QUICK BITES

BY DARREN CLIMANS

The new real thing

Consumers thirsty for better-for-you beverages In 1886, Atlanta pharmacist John S. Pemberton came up with the most consequential new consumer packaged good product idea in recorded human history— Coca-Cola. The key to this innovation was the mixing of uniquely flavoured syrup with carbonated water, creating the first Carbonated Soft Drink (CSD). A single serving of Coca-Cola in 1886 sold for 5 cents per glass and daily consumption was approximately nine glasses per day, making for an annual revenue of less than $200. From this humble start, the Coca-Cola Company has grown during its 100-plus years to a market cap of roughly US$230-billion. Current global consumption of all types of Coca-Cola beverages is close to 2-billion servings per day.

Trend is your friend, until it ends Despite its market dominance, there are storm clouds on the horizon for traditional Coca-Cola. According to Euromonitor International, North American sales by volume of CSDs have shrunk by approximately 1% per year since 2014. In contrast, during the same period, sales of better-for-you health and wellness beverages have increased nearly 30%. In a recent presentation, Beverage Marketing Corporation noted: “Carbonated soft drinks… declined slightly for the 14th

consecutive year, and declines have continued into 2019… more declines are likely to come in the years ahead (as) consumers are migrating to healthier options and want more variety.” CSDs, while still a significant slice of the beverage pie, are trending down in mature Western markets.

The rise of functional beverages Technomic’s 2018 Canadian Beverage Consumer Trend Report details important shifts in the beverage market: ·

29% of consumers

61% associate

ages 18-34 would be likely to order drinks that offer functional benefits;

beverages with functional benefits as healthier;

29%

are willing to pay slightly or significantly more for items that offer functional benefits;

41%

report that healthfulness is an important factor in their decision to purchase prepared foods or beverages from a convenience store.

| JANUARY/FEBRUARY 2020

EXHIBIT 1 GLOBAL GROWTH PROJECTIONS FOR NON-ALCOHOLIC BEVERAGES ✶ Coffee: 5% compound annual growth rate (CAGR) expected from 2017-2022.

✶ Tea: Expected 5.5% CAGR from 2017-2023. ✶ Soft drinks/carbonated beverages: Expected 2.8% CAGR from 2018-2023. The World Health Organization urges all countries to impose tax on sugary drinks to reduce obesity (Mexico’s introduction of a 10% tax on sugary beverages led to an average reduction of 6% in sales the following year.)

✶ Bottled water/functional drinks: Expected to

expand at a CAGR of 11% from 2019-2023 with 36% of the growth coming from North America. Functional drinks are non-alcoholic beverages that are altered by adding ingredients to offer health and other functional benefits—vitamins, minerals, acids, herbs, and raw fruits or vegetables are the most common additions.

✶ Protein drinks: The supplement beverage market is

expected to grow at a CAGR of 6.3% from 2017-2025. Protein drinks are increasingly being marketed as sports nutrition drinks. Plant-based proteins are also becoming popular among consumers looking for non-dairy alternatives to satisfy their protein intake. Examples include, pea protein and rice protein.

✶ Probiotic drinks: Expected 8.4% CAGR from

2018-2023. Probiotics are live bacteria and yeasts, such as Bifidobacterium and Lactobacillus, which offer digestive benefits. Probiotics in beverages are derived from fermented dairy, such as yogurt or kefir, or fermented vegetables (e.g. kombucha).

✶ Juices: Fruit and vegetable juices market is expected to grow at a CAGR of 5.9% from 2018-2025.

✶ Cannabinoid (CBD) beverages: Drinks infused with

CBD, which has medicinal and pain-relieving qualities, are popular in the U.S. In Canada, it’s a burgeoning area that’s heating up quickly, as new products enter the market from major beverage industry players, as well as independents.

Source: JBR Food & Beverage Newsletter

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Functional beverages defined There are many terms that can be applied to beverages under the umbrella of better for you (BFY) or health and wellness. Broadly speaking, they cover naturally occurring or essential additives that offer the potential of enhanced health and/or reduced risk of disease. So-called healthy beverages generally tend to: Have ✓ Nutritional density ✓ Antioxidants ✓ Antimicrobials ✓ Vitamins ✓ Probiotics ✓ Proteins Not Have ✕ Artificial flavour and aroma enhancers ✕ Artificial texture enhancers ✕ Added sweeteners ✕ Artificial food colours ✕ Artificial preservatives

What’s new in functional beverages? According to the global Innova New Product Database, the top ranked beverage health claims as a percentage of total new launches include: 1. Antioxidant 2. Energy/alertness 3. Digestive/gut health 4. High source of protein 5. Probiotic Claims of digestive/gut health, high protein and probiotics are all trending up. Significantly, the global trend on new soft drinks launches with a kombucha claim tracked 68% growth. (See sidebar for examples of new/leading better-for-you beverages and their related health claims.)

Be thirsty for change Technomic’s 2018 Canadian Convenience Store Consumer Trend Report states: “Healthy eating trends are creating opportunities for c-stores. Increasingly, consumers are seeking not just healthy options, but foods and beverages that provide meaningful CCentral.ca

benefits.” Global consumer demand for functional beverages is expected to expand at a compound annual growth rate (CAGR) of 11% from 20192023, with 36% of the growth coming from North America (Exhibit 1). And there’s even more on the line when it comes to owning the beverage space. For instance, using beverage offerings to achieve broader consumer reach is exactly what McDonald’s did a decade ago when it recognized that breakfast was the fastest growing part of the day for foodservice. According to research company NPD Group, breakfast sandwiches make up a third of all orders placed during that time of day. Combine that with the interest in premium coffee offerings, and the path was clear—grow coffee consumption as a means to win the breakfast wars. In 10 years, McDonald’s has tripled its drip coffee sales and more than doubled its market share to north of 13%.

The bottom line for your bottom line After a century of unparalleled growth, shifts in consumer tastes away from CSDs have primed a reorientation in the beverage space. Fortunately, convenience stores can leverage competitive advantages to profit from this change. The opportunity is at hand to translate c-store strengths—diverse channel affiliations, large refrigerated and ambient shelf-space, and deep category knowledge—into the taking of a bigger slice of the pie. Increasingly fragmented consumer demand for better-for-you beverages should be seen as a welcome challenge, an opportunity to leverage a c-store point of difference, and grow your bottom line. ◗ Darren Climans is a foodservice insights professional with close to 20 years’ experience partnering with broadline distributors, CPG suppliers, and foodservice operators. His practice is to understand issue-based decisions by taking a data-driven approach to strategic decision making.

BFY BEVERAGE WATCH VITA COCO CBD SOFT DRINKS

• Coconut water base with sparkling water • 20mg of broad spectrum CBD per 330ml can • Three flavours: cloved orange, apple ginger, lemon cardamom

ATOKA WELLNESS

• Ocean Spray crafted plant-based drinks • Includes tea tonics, oatmilk elixirs, and herbal shots in four varieties that blend cranberry, flora, tea elements, fruits • In test markets, roll-out planned for this year

OUTSHINE BEVERAGES

• Coconut water extension of Nestlé fruit bar line • Natural electrolytes and fruit puree with no added sugar or sweetener • Launch planned for early 2020

JACKED RABBIT

• High protein beverage based on the Nestlé Nesquik family platform • 38g of whey isolate protein and less than 1g of sugar • Two flavours launched in the U.S. summer 2019

JUSTE PRESSÉ

• Made from cucumber, ginger and apple • 27% vegetable based—no sugar, additives, preservatives • High pressure processing to preserve vitamins and antioxidants

PLANTSY

• Plant-based algae protein in two flavours • Contains 15g of protein, GMO-free, rich in fibre, healthy lipids, vitamin and minerals • Gluten-free, soy-free, free from added sugar and sweeteners

DAY ONE CBD SPARKLING WATER

• Lemon, grapefruit, mango, lime and watermelon with 20mg broad spectrum hemp extract • Distribution targeted to c-stores, natural food stores and big box retail • Zero calories, no sugar, no carbohydrates

CHERRiSH

• Sports drink made from all natural high phenolic cherries • Recovery and sleep benefits • Recent distribution agreement with Sobeys

POWER FLOWER KOMBUCHA

• Organic tea-based fermented beverage • Floral brew blends hibiscus, orange, lemon thyme and green tea. Source: BeverageDaily.com

JANUARY/FEBRUARY 2020

“The one place in Canada where retailers and operators get a chance to see, touch, taste and ask questions about the very latest products available to your customers and the latest products and services to improve your business.”

Insights. Networking. Innovations. Opportunities. The Convenience U CARWACS Show is the place to be in Toronto The countdown is on! Get ready for Canada’s largest convenience, gas and car wash industry event—the Convenience U CARWACS show, taking place March 3 and 4 at The Toronto Congress Centre. This is your opportunity to get ahead of the game by exploring the latest in products, services and business strategies shaping convenience and gas retailing. The trade and education event includes two days of valuable insights, networking and selling opportunities for everyone in the convenience, gas and car wash industries. “Convenience U CARWACS is the one place in Canada where retailers and operators get a chance to see, touch, taste and ask questions about the very latest products available to your customers and the latest products and services to improve your business,” says Michael Cronin, vice-president, events, of show organizer EnsembleIQ. “Anyone who wants to know about the latest developments in the industry and have the opportunity to network, talk

and share best practices with industry leaders and peers needs to be there.” Each day, from 9 a.m. until noon, attendees can take advantage of valuable education sessions and presentations designed to help retailers develop the tools and strategies to improve customer service, enhance businesses and increase the bottom line. In an ever-changing industry, it’s important to be on top of the latest developments—the sessions will include a wide variety of topics affecting convenience retailers. As well, there are a number of agenda items specifically targetting car wash operators, including the Canadian Carwash Association Car Wash Tour. The popular networking event features a lunch and visits to a number of CCA member car wash sites across southern Ontario. And, of course, the trade show is a must-attend attraction. Open daily from 12 to 5 p.m., it features hundreds of exhibitors showcasing everything you need to operate your business, including the latest and most innovative products and services available in the Canadian market. ◗

Visit www.convenienceu.ca for event details and to register.

| JANUARY/FEBRUARY 2020

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ATTEND

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MARCH 3-4, 2020 Toronto Congress Centre

s s e c c Su he t n is i

s a r t ex

As a new LCBO Convenience Outlet, c-store operator Karan Pansi is all about giving customers what they want BY DONALEE MOULTON

â&#x20AC;&#x153; 12

WE WANT CUSTOMERS TO FEEL GOOD FROM THE SECOND THEY STEP INSIDE.

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R E TA I L E R S P OT L I G H T

ENTREPRENEUR KARAN PANSI

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“At our store, you always get greeted with a smile,” says Pansi. “We want customers to feel good from the second they step inside.” Pansi is the owner of several businesses in Caledon, Ont., a community of 67,000 roughly 60 km northwest of Toronto. Three years ago, he purchased an Esso gas station and convenience store, his first foray into this sector. Before opening this and other businesses, Pansi sold car parts, a job that gave him first-hand insight into how to satisfy customers and how to sell, and upsell, to those same customers. He notes that in addition to a warm smile and a friendly greeting, every customer who comes in to the Esso convenience store is spoken to personally. It might be a comment about the weather or a question about the customer’s needs, but conversation is critical and enjoyable. Many of Pansi’s customers are local residents looking to pick up milk and bread; many others are commuters en route to Guelph seeking out the day’s first cup of coffee; or cottagers stopping for a snack on their way to a summer retreat. Regardless, notes Pansi, “most customers like to chat. If they have to come inside, they’re not in that much of a hurry.” JANUARY/FEBRUARY 2020

PHOTOS: BANGA STUDIOS

Satisfied customers are customers that feel welcome every time they enter your convenience store. That philosophy pervades Karan Pansi’s approach to business and his success as an entrepreneur.

| 13

Pansi and his team make the most of that friendly attitude. Every customer is asked what they need and, at the checkout, they are also asked if they would like to purchase a lottery ticket. It’s a simple selling technique that works wonderfully, says Pansi. Of course, that helpfulness is in keeping with Pansi’s approach to customer service. That approach can be summed in six words: give the customer what they want. It’s a mantra Pansi and his staff strive to live up to. “We try to give customers everything they need. We’ll go out of our way to get it,” says Pansi. Like most convenience stores, the basics—lottery tickets, groceries and tobacco—drive most individuals through the front door. However, Pansi also tries to make the lives of his customers much more convenient. He’s even gone so far as to find a fridge for one loyal customer. Once the fridge was located at the right price, the customer was able to pick it up at their favourite c-store. Little and not-so-little extras are a fabric of Pansi’s business ethic and his entrepreneurial spirit. Last year,

for example, he inked a deal with the U-Haul Company of Canada Ltd., to serve as a U-Haul neighbourhood dealer in the Caledon community. Now, the Esso offers U-Haul trucks, towing equipment, moving supplies and in-store pick-up for boxes. This year, Pansi applied for and received a licence to sell wine and other liquor through the Liquor Control Board of Ontario Convenience Outlet Program. For the past few months, customers have been able to pick up a bottle of spicy rum and a dry merlot along with their Saint Jimmy’s Coffee. “It all draws people in,” says Pansi. “You have to be thinking about what customers want.” Two factors top that list: cleanliness and access. Customers need to be able to find what they want quickly and efficiently. They also want to be reassured about the quality of the store where they are doing business. “Our store is nicely laid out,” says Pansi. “Everything is in view.” That includes the smile on the store clerk’s face as customers enter and the sound of “Have a great day” echoing in their ears as they leave. ◗

Snapshot Opened: Originally opened about 20 years ago. Karan Pansi purchased the convenience store and the Esso gas station in 2016. Location: 1521 Charleston Sideroad, Caledon, Ont. Hours: 5:30 a.m. to 9:30 p.m. Monday-Friday; 5:30 a.m. to 9 p.m. Saturday; 6 a.m. to 9 p.m. Sunday. Staff: Three—all of whom are trained to be friendly and helpful.

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| JANUARY/FEBRUARY 2020

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TWO ICONIC BRANDS COMING TOGETHER!

SOURCE: 1. JAN 18 IPSOS SPK Changeovers DUEL Idea Screen 2. Keurig Canada Distributor of CRUSH, data 2019

Item # 00577000158100 Retail Dimension: 15“ W x 11“D x 44“H

Contents: 15 SOUR PATCH KIDS CRUSH ASSTD 185g-577000155600 15 MAYNARDS SWEDISH BERRIES TROPICAL 185g –577000156300 21 MAYNARDS SWEDISH BERRIES 185g-577002150500 18 MAYNARDS SOUR PATCH KIDS 185g-577002150600 15 MAYNARDS SOUR PATCH KIDS BIG HEAD 185g-577000151900 15 MAYNARDS SOUR PATCH KIDS MANGO 185g-577000151200

MAYNARDS IS BRINGING DELICIOUS TROPICAL FLAVOURS TO LIFE IN BITE-SIZED SWEDISH BERRIES CHEWY CANDY

MAYNARDS SOUR PATCH KIDS TROPICAL CANDY WAS THE #1 INNOVATION IN 2017 3

SOURCE: 3. Nielsen GDM+C&G everyday candy latest 52 w/e 12/29/17

NOMINATIONS

N OW OPEN F O R 2 02 0

Do you know a Star Woman in Convenience? Convenience Store News Canada is awarding exceptional women in our industry for their commitment, innovation and leadership in these key categories: R E TA I L E R S & D I S T R I B U TO R S M A N U FACT U R E R S I N D U S T RY A S S O C I AT I O N S A N D I N D U S T RY LU M I N A R I E S S O LU T I O N P R OV I D E R S A N D C O N S U LTA N T S The 2020 winners will be recognized across our digital platforms, featured in our July/August edition of Convenience Store News Canada magazine, and honoured at our annual awards ceremony this fall.

SPE CIA ISS UE

< KERRY ANN NICHOL SON CORE-M ARK

< JAN MCCAL LUM RICOLA CANADA

Deadline to nominate: March 31, 2020

< WENDY KADLOV SKI NICHOL BY’S

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C OV E R S TO RY

A N ATIONA L CO NSUM E R

Defining convenience New data delves into the minds and habits of Canadian c-store shoppers BY MICHELLE WARREN

Convenience means different things to different people, but for most c-store shoppers it’s about saving time and effort. As expected, the definition of convenience includes location, hours and product selection, however, for a growing number of Canadian consumers it also comes down to overall ease of experience. Convenience stores that prioritize simplifying the shopping and purchase steps are more likely to see rewards with increased traffic and basket size, according to insights from the new C-store IQ: A National Shopper Study from Convenience Store News Canada. C-store IQ is the first convenience and gas specific study that delves into the wants, needs, perspectives and habits of Canadian consumers. We worked with the research team at EnsembleIQ and Canadian Viewpoint Inc. to survey more than 1,000 convenience shoppers across the country to bring our readers CCentral.ca

and our partners the insights and data necessary to better understand customers and achieve business success. Survey participants shared their definitions of convenience and so much more in this comprehensive study: This is a topline report and we will be digging into the data throughout 2020, both in the magazine and online. For starters, Canadian convenience store shoppers associate the word ‘con-

venience’ with overall speed—41% of those surveyed said it purely comes down to having a “convenient” experience and 34% define this as a “quick stop/in and out.” Proximity—to home and work—is important, with 25% of shoppers saying convenience is “close to me,” while 16% said longer hours and being open when larger stores are closed is important.

% OF SHOPPERS THAT DEFINE CONVENIENCE AS... Quick stop / In and out

34%

Convenient location/ Close to me / Local / Around the corner

25%

Extended hours / 24/7 / Open when larger stores are not

16%

Easy

13%

Basics / Staples (milk, eggs, bread. etc.)

Variety of items / A little of everything

Everything you need

More expensive

BACKGROUND • Sample: n=1,059 convenience shoppers • Ages 18+ • Reside in Canada • Shop convenience stores at least once a month

JANUARY/FEBRUARY 2020

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WHO’S SHOPPING?

A quick stop at a convenience store is part of the fabric of daily life for most Canadians: 43% shop chain convenience stores and 38% visit independently-owned convenience stores at least once a week. Millennials lead the charge when it comes to convenience shopping: 50% said they shop a chain c-store at least once a week, compared to 45% of generation X and 36% of baby boomers. For independently owned c-stores, 42% of millennials are more likely to shop at least weekly, compared to 34% of generation X.

2 WHAT’S DRIVING

CONSUMERS IN-STORE?

% OF TOTAL INFLUENCED TO VISIT A CONVENIENCE STORE 54% 46% 28% 17% 16% 8% 7% 7% 7% 7% 7% 6% 4% 4% 3% 2%

Proximity To purchase gas Loyalty program Word of mouth Coupon Mobile app offer from convenience store Other Email Promotion or message on social media (Facebook, Twitter, etc.) Gas price app None of the above Print circular Radio or TV advertisement Billboard Text message Mobile ordering

Location, location, location: For more than half—54%—the key element that prompts them to visit a particular c-store is proximity, followed by the • Text message: Millennials (5%) need to purchase gas (46%) and loyalty are more likely to be influenced than programs (28%). boomers (0.2%). More than half of c-store customers • Mobile ordering: Millennials (4%) shop at a convenience store that has a loyare more likely to be influenced than alty program and 42% are enrolled in and generation X (3%) and boomers (1%). actively use their store’s loyalty program. • Email: Millennials (8%) and genTechnology and related apps aren’t eration X (9%) are more likely to be huge overall drivers for Canadian c-store influenced than boomers (4%). shoppers, however when analyzing data All indicators are that the future is by generation, new patterns emerge. Younger shoppers prefer less bulk in their digital, which calls for better optimization and integration of stores’ wallets, opting instead for mobile apps. digital infrastructures. Millennials respond more readily to digital promotional tactics (mobile app, social media promotions, mobile ordering and email) and younger shoppers in general are influenced by promotional signage or car wash promotions RATINGS FOR Price of products during their shopping trip. CONVENIENCE Fun to shop Here’s how digital efforts STORE SHOPPED Quality of prepared food measure up: MOST OFTEN Loyalty/rewards program • Mobile app: Millennials Variety of products offered (14%) are more likely to be Helpfulness of employees influenced than generation X Cleanliness of store (8%) and boomers (3%). Organization of the store • Social media promotion: Millennials (10%) are more likely Friendliness of employees to be influenced than generation Speed of shopping trip X (8%) and boomers (4%). General convenience

| JANUARY/FEBRUARY 2020

3 WHERE AND WHEN DO CANADIANS SHOP?

Canadians are a loyal bunch, with 70% of shoppers saying they typically visit the same store each time. When considering the convenience store they shop most often, foundational attributes, including the price of products (40%), fun to shop (18%), quality of prepared foods (20%), loyalty programs (19%) and variety of products offered (16%), are the top five reasons why shoppers favour a particular store.

Excellent/Very good

40% 20%

40%

20%

38%

19%

30%

17% 14%

Good

34%

40% 43% 51%

37% 28%

11% 28%

47% 58% 61%

11% 35% 9% 28% 7% 28% 6% 29%

Fair/Poor

26%

54% 62% 65% 65%

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TIME OF DAY TYPICALLY SHOPPED

33%

9:00 am 10:59 am

17% 17%

| |||

14%

7:00 pm 9:59 pm

WHAT ARE

4 CUSTOMERS BUYING?

6:00 am 8:59 am

10:00 pm or later

24%

39%

11:00 am 1:59 pm

28%

4:00 pm 6:59 pm

2:00 pm 3:59 pm

While trips to the convenience store happen most often when shoppers need to purchase gas (51%), 41% of shoppers also make special trips to the c-store from home, while 38% stop in while running other errands. The breakfast hours are ripe for shopper conversion, with only 17% of shoppers starting their day with a trip to the convenience store. Visits gradually increase throughout the day and peak during the rush hour/early dinner daypart, with visits from 39% of shoppers. In an ideal world, shoppers who pur-

chase gas would also pop into the c-store to spend more money, however only 3% say they purchase merchandise and/or foodservice “every time,” while 17% purchase these items “almost every time.” In turn, 19% of shoppers say they “rarely” purchase merchandise or foodservice. Of the more than one-in-four people who shop for both gasoline and in-store merchandise at least once a month, 28% say they were recently influenced by frequent buyer/loyalty programs to make the trip inside and spend. About one-in-five shoppers were influenced by promotional signage and one in 10 were influenced by mobile app promotions/deals.

FREQUENCY OF CONVENIENCE STORE VISITS: GASOLINE VERSUS IN-STORE Gasoline only In-store only Both

46% 44% 33% 22% 32% 30% 19% 3% 18%

5% 10% 9%

Weekly

Once every Less than Daily 6 months once a year

Once a month

Never

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3% 2% 4%

4% 7% 4%

1% 1% 1%

Yearly

Shoppers typically visit a variety of stores to satisfy their needs, however convenience stores are the channel of choice for a number of categories. Lottery tickets are a key driver, with 53% of shoppers purchasing lottery tickets in the past month, while 46% purchased gasoline. Traditional convenience products are among the most frequent purchases, with 36% of shoppers buying salty snacks, followed by candy or gum (33%), canned/ bottled soda/pop (30%), bottled water (26%) and hot dispensed beverages (25%). Not surprisingly, among those who purchase cigarettes and other tobacco products, c-stores are the destination of choice: 22% of consumers visit a c-store to buy cigarettes. Frozen drinks, almost exclusively the domain of chain c-stores, are a big pull, with 19% of shoppers buying these within the last month. And, yes, the milk run is still a huge part of the c-store experience, with 30% of shoppers buying milk in the last month. There’s still plenty of room for growth in foodservice, with 16% of shoppers stopping for grab-and-go prepared foods (hot dogs, packaged sandwiches, salads etc.) and only 10% buying madeto-order food. It’s worth noting that those who define themselves as “health-conscious shoppers” are likely to spend more than non-health-conscious shoppers, mostly owing to higher priced betterfor-you products.

HOW MUCH ARE

5 SHOPPERS SPENDING? On average, shoppers spent $13.56 during their most recent convenience store trip, not including the price of gasoline. Cards are king, with more than one-third of shoppers (35%) using a debit card, while 31% opted for a credit card. Cash is still a major mode of payment for 30% of shoppers, while mobile payment accounts for only 1% of purchases. It’s worth noting, however, the generational divide when it comes to payment prefCCentral.ca

erences: 38% of boomers and 29% of generation X are more likely to have paid with cash, compared to 22% of millennials. Instead, 41% of millennials said they paid via credit card, compared to 27% of generation X and 25% of boomers. Younger shoppers already demonstrate higher usage of debit and mobile payment compared to older generations and, as a result, convenience stores will continue to benefit from opportunities to offer more digital or frictionless shopping, payment, and promotional solutions. According to spending patterns, younger shoppers are the c-store shopper of the future: A large percentage of boomers spend less than the younger generations, perhaps indicating they depend less on quick c-store visits to buy essentials. Overall, however, as Canadian consumers feel increasingly time-pressed and, in turn, seek solutions to make life easier and more streamlined, c-stores have an important role to play in meeting these needs by delivering the right products, at the right time, right away: It’s all about convenience. ◗

TOP PRODUCTS: Lottery Tickets Gasoline/Fuel Packaged salty snacks (potato chips etc.) Candy, gum or breath fresheners Milk Canned/Bottled pop

% PURCHASED LAST MONTH 53% 46% 36% 33% 30% 30%

To see results for all products, visit ccentral.ca

CCentral.ca

% INFLUENCE BY TO SHOP IN-STORE DURING RECENT TRIP Frequent buyer/Loyalty programs

28%

Promotional signage

20%

Car wash promotions

16%

Banners/Window signs

15%

Pump toppers (print ads on pump)

14%

Gasoline nozzle display ads

11%

Mobile app promotions/Deals

10%

Video displays on pump

Other

Coupons dispensed from pump

Audio music feed with messages

MOST RECENT C-STORE SPEND (NOT INCLUDING GAS/FUEL) 24% 19% 14% 13% 12% 10% 4% 2% 2%

$5.00 - $9.99 $10.00 - $14.99 $2.00 - $4.99 $15.00 - $19.99 $20.00 - $30.00 $30.00 or more Less than $2.00 Only bought gasoline I don’t know/can’t recall

Coming up C-store IQ: A National Shopper Study is a comprehensive study of Canadian convenience shoppers. We will be diving deep into the data in the coming months, sharing with you consumer insights on a number of key topics, including:

Tobacco Foodservice Healthy Technology and eating vaping

Payment and loyalty solutions

JANUARY/FEBRUARY 2020

Gas and electric vehicles And more!

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ASK THE EXPERT

BY MICHELLE WARREN

Plain, but not-so simple Norman Pridgeon, vice-president, sales – JTI-Macdonald Corp., on how tobacco companies and c-stores can work together to navigate the new world of plain packaging

Over the last few years, retailers and tobacco manufacturers have successfully navigated a number of regulatory changes—display restrictions, menthol bans and changes in health warnings and packaging—and we expect to manage this transition just as effectively together. We’ve learned through each one of these transitions how critical the role of retailers and clerks is in guiding adult smokers through the changes as smoothly and efficiently as possible. This time, we’ve been able to learn from the experiences of JTI markets that have already converted to plain pack and apply the best practices to Canada. From the beginning of this transition to plain packaging, being a true partner through change has been our top priority.

As of February 7, all tobacco products—with the exception of cigars— sold by retailers to consumers must be in plain pack. We appreciate how hard c-stores and their staff have been working to get ready for this transition. In just three months, c-stores will have reorganized their storage, shelving, trained staff and sold through branded inventory—this is the shortest implementation timeline of any country so far and the speed and agility Canadian retailers have demonstrated has been truly impressive. When you can’t use branding, colour or pack shape to differentiate between products, it will be even harder to provide quick and efficient service to the hundreds of customers c-stores serve every day. The experience from other countries tells us that smokers become frustrated as they spend more time waiting in line and as they are more likely to be accidentally handed the wrong tobacco product. Tobacco storage needs to be exceptionally well planned and organized so that SKUs can be quickly located when customers ask for them.

How is plain packaging reshaping your business in Canada and what are you doing to respond to the new regulations?

What do you want c-stores operators and their staff to know about the changes? Any tips?

| JANUARY/FEBRUARY 2020

How are the changes expected to affect the number of SKUs?

How do you think this will influence the contraband market?

Under the new regulations, only Regular Size and King Size cigarettes are permitted. This means that after February 7, Super Slim and Super King (or 100s) SKUs can no longer be sold. It’s too early to speculate beyond this. We do know that new brands have continued to be successfully launched in markets that already have plain packaging in place, and we know that Canadian adult smokers are discerning. They will continue to seek out the best quality product for the best value and we will continue to take great pride in meeting their high expectations.

When all packs look the same and only the brand name visually distinguishes one product from another, there is a risk that price becomes the key driver and smokers trade down to cheaper products or turn to the illegal market. That’s a risk to all of our businesses and we need to take every action to crack down on illegal trade now and call on governments to step up and do their part. We’ve been working with law enforcement to make sure they are aware of the move to plain packaging, understand how this could impact the illegal trade and provide information to help them identify legitimate from contraband product. In a plain pack environment, their jobs become even tougher and it’s up to us to provide them with tools and training to support their work. Retailers should continue to be vigilant in reporting any suspected illegal tobacco activity in their area to local law enforcement or Crime Stoppers. CCentral.ca

What is your company doing to help c-stores prepare for the transition to plain packaging?

It’s in everybody’s interest to have the smoothest possible transition at point of sale, and we’ve been committed to educating and supporting retailers every step of the way. Retailers play a critical role in answering questions from tobacco consumers about pack, branding and product changes and it’s our job to help them answer them. When smokers can’t buy Super Slim or Super King cigarettes after February 7, or don’t understand why their pack has changed, retail clerks are the front line. Over the past few months, we’ve set up information sessions, a dedicated trade website and communications materials to explain what’s changing, why, and what the alternatives are. We’ve also worked closely with c-stores to better understand their needs going forward, suggest storage solutions and ways to organize shelving so that clerks are able to more easily identify products when consumers ask for them. While much of the work will already have been completed before February 7, there is no doubt that it will be an evolution. It’s important that we listen well to what adult smokers and retailers need and respond effectively.

How are you reaching out to consumers to help smooth the transition?

In the weeks leading up to plain packaging, we used our packs and advertising in adult-only locations to let adult smokers know that their packs would be changing and alert them to any name changes, as colour-based brand variant names are no longer permitted. We printed the message “Red is Bold” for example, so that smokers know how to order their favourite LD pack after February 7. We also used these tools to reassure consumers that while the pack and product is now plain, the blend and quality has not changed. This reassurance is critical; when the packaging of any consumer good changes, some consumers will assume that the product is also different. In fact, we would never make a product change at the same time as a pack change for exactly this reason—all of JTI’s tobacco blends and filters remain exactly the same inside their plain exterior. ◗

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SNAPSHOT

BY KATHY PERROTTA

Micro-markets, major potential

Burgeoning concept combines digital technologies with offline shopping experiences Looking at competitive dynamics within the food and beverage retailing marketplace, competition is steep. As the lines of competitive differentiation continue to blur between channels, retailers look for ways to amplify consumers’ experiences both in-store and online, while being mindful of contemporary values that are increasingly shaping individuals’ food and beverage choices. From the prioritization of fresh (e.g. increased vegetable consumption) to the demand for high quality, less-processed , solution-oriented options and to the quest for globally inspired cuisines, consumers are on a journey of discovery. It is both challenging and changing food retailing as we know it. At the centre of this change is technology. Just as retailers and restaurants have increasingly become tech companies with digitized shopping and daily delivery services, tech companies are also becoming food companies. Nowhere is that concept more apparent that through the lens of the relatively new concept of micro-markets. Micro-markets are a form of unattended retail outlets. Most often they are small square footage bricks-and-mortar stores or vending services that resemble a foodservice/grocery store hybrid model. Due to their relatively small size, they can be strategically located in high-traffic areas, such as office building concourses, airports or university campuses. They typically do not have on-site personnel to manage or oversee operations and often include fully digitized electronic kiosks to promote easy and speedy customer checkout.

While micro-markets may be viewed as handy grab-and-go concepts, their true value proposition lies in the opportunity to weave together digital technologies with offline shopping experiences, without the inconvenience of expending time and effort traversing store aisles seeking one-meal solutions or waiting in line to pay. It is vitally important for online retailers to gain a foothold in physical store retailing, given that the majority of food dollars, whether at retail or in foodservice, is still spent in bricks-and-mortar locations. The Ipsos Foodservice Monitor (FSM) tracking study reports that micro-markets in Canada, while still dominated by vending machines, accounts for as much as 3% of foodservice traffic. While micro-markets’ share has increased in year-overyear tracking (dominated by growth in Ontario), this channel remains a relatively unknown player. However, at the heart of micro-market expansion in North America is Amazon Go, which is reportedly set to open 3,000 new locations by 2021. The branding power and marketing clout of this behemoth could shine an entirely new light on this channel, particularly if Amazon includes highly urbanized Canadian locations in their expansion plans. Current Canadian micro-market concepts most prominently include Longo’s Pronto Eats, which is a strategically placed smallsquare footage cashless grocery experience in downtown Toronto (with more locations planned). It would be hard to imagine that there are not a number of other retailers or tech companies eyeing this new concept, particularly given their reportedly high margin targets.

| JANUARY/FEBRUARY 2020

Beyond profiting from this concept is also the opportunity to connect younger consumers to a convenience-oriented fully digitized food shopping experience. With a focus on locally-sourced fresh produce, daily prepared ready-to-eat options and easy-prep solutions, such as meal kits, the technology enabling the micro-market concept provides the shopper a sense of control to hand-pick options that meet personal taste preferences, specific dietary needs and satisfy rising sustainability requirements. It could also facilitate blockchain-like technology that allows shoppers to instantaneously evaluate the product route to market and determine whether it aligns with their sustainability values. Given the evolving edible ethics criteria increasingly shaping young consumers’ decisions, food and beverage brands may have a unique opportunity to deliver messages of personal and social benefits in a less cluttered environment. Ipsos’ research reports that 73% of consumers between the ages of 18 and 34 agree that a product’s environmental impact strongly or somewhat influences their decision to consume a product, with a similar proportion reporting that sustainable packaging plays an important role in their decision-making. With a growing requirement for augmented experiences that mash digital technologies with in-store engagement, we need to closely monitor the emerging channel of micro-markets. ◗ Kathy Perrotta is a vice-president with Ipsos Market Strategy and Understanding, working with the Food & Beverage Group Syndicated Services. Data sources within this group include, Ipsos FIVE and Foodservice Monitor (FSM). CCentral.ca

By the Numbers 25,000 221,290 $55.3 billion

FUN FACTS Atlantic Canada makes up about 6% of the Canadian population, but is home to almost

Convenience stores across Canada.* People employed by c-stores in Canada.*

14%

of the country’s c-stores.*

Money spent at the nation’s convenience stores annually. *

10 million

$6,589,050,729

QUICK QUIZ

$1.8 billion

CCentral.ca

What is the average time a shopper spends in a c-store?

1 in 3

Canadians visits a convenience store every day.*

Customers served at c-stores per day.*

Amount of lottery sales generated by c-stores.*

*(Source: Convenience Industry Council of Canada 2019 State of the Industry Report. A full copy of the report is available to CICC members) (Answer: C – 3 minutes 33 seconds Source: NACS)

$22.4 billion

Taxes collected and remitted to federal and provincial governments by c-stores. *

Federal tax revenue collected by c-stores for tobacco, including vaping products.*

5 minutes 55 seconds

4 minutes 44 seconds 3 minutes 33 seconds

JANUARY/FEBRUARY 2020

| 25

CATEGORY CHECK

BY MICHELE SPONAGLE

Meat of the matter Robust sales of jerky, sticks and bars give snack-lovin’ Canadians plenty to chew on Meat snacks are taking a big bite out of the snack category for convenience stores. Consumer spending for meat snacks is up 9%, according to the Nielsen Convenience Report (July 2019), significantly outpacing other types of snacks, including chocolate, candy, cold drinks and gum. In fact, the meat snack category is the fastest growing in the convenience store space. Customers are fuelling sales based on evolving tastes and habits, as sugary snacks have fallen out of favour, leaving the door open for jerky, steak bars and meat sticks to step in and snag a healthy market share. They tick all the boxes for what customers want from their snacks— good taste, portability, value and satiety. The continued popularity of the keto diet and its focus on protein-focused foods also plays a key role. Snacking’s role in daily consumption habits is also creating new opportunities for convenience stores. Canadians’ love for snacks is increasing, with four out of 10 using them as meal replacements: Their growth in the convenience channel—up 4% in 2019—tells the tale. Consumers have found a sweet spot in savoury meat snacks—balancing their craving for something indulgent, yet nutritious. Who’s buying meat snacks may be surprising to some. Doug Surerus, director of sales for Jack Link’s Canada, says adults ages 25 to 40 are the prime customers for products like jerky, while pepperoni sticks skew a bit younger. Jack Link’s has snagged the top spot as a brand leader among snack companies. Its success has

sparked the introduction of two beef steak strip products (original and teriyaki). This summer, Jack Link’s will add to its new lineup with a zero sugar bar, which is sure to appeal to sugar-shunning keto diet devotees. Catherine Kurz, marketing manager with The Great Canadian Meat Company (which also distributes Kurtzies Gourmet Deli products), says that there are misconceptions in the meat snack category in terms of who’s buying. “The thinking is that the meat snack consumer is a male who enjoys hunting, outdoors, sports, and works in trades or transportation,” she says. “Though this is largely the demographic we target, we are finding all kinds of people—yes, women, too—are buying meat snacks, due to their healthier nature.” The strong customer base for meat snacks is ripe for new products. Calgary-based Big Chief is all in when it comes to beef, but other companies are mixing it up with meat snacks made with turkey (jerky from Jack Link’s); venison (Great Canadian Meat’s sausage sticks) and pork (Slim Jim’s hickory-smoked and maple-flavoured bacon jerky). The trend toward ramping up spiciness in foods is still hot, with meat snacks launching new flavours, like habanero, Cajun, chorizo, green chile, and sweet-plus-heat versions. Meanwhile, Duke’s, which has built a reputation for its fresh approach and ingredients, has gotten creative with hip flavours, such as tomato basil and hickory peach BBQ smoked shorty sausages, plus honey bourbon beef brisket strips. “While one might think that unique, fun, experimental flavours are rising in

| JANUARY/FEBRUARY 2020

CANADIANS’ LOVE FOR SNACKS IS INCREASING, WITH FOUR OUT OF 10 USING THEM AS MEAL REPLACEMENTS: THEIR GROWTH IN THE CONVENIENCE CHANNEL—

UP 4% IN 2019

—TELLS THE TALE.

popularity, we have found it’s actually the opposite,” says Kurz. “Original or mild are still our top sellers, followed by a classic hot or spicy flavour in our sticks.” Where things are really changing is with packaging. Duke’s offers a range of sizes in well-designed resealable bags for snacking on the go. The trend is to offer single-serving versions, as well as larger sizes, such as the 230g bags of beef jerky from Jack Link’s. Others are also reporting success with larger offerings. “Our bagged, larger quantity packs are some of our best-sellers, as consumers want a snack they can keep in their car, in their desk drawer, or in their cupboard for school lunches,” says Kurz, who emphasizes the importance of having resealable bags available to maintain freshness. Given the strength of sales, it makes sense for companies to go big to give customers what they want—more tasty meat snacks. ◗ CCentral.ca

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BACKTALK

BY TALBOT BOGGS

PHOTO: DANIEL ALEXANDER

Hungry for healthy

| JANUARY/FEBRUARY 2020

CCentral.ca

Wayne Barker, director, sales at Danone Canada, knows a thing or two about Canadians’ love for food and snacking. During his 30 years in the business, he’s worked at Mondelez, Kraft, Cadbury and The Allan Candy Company. In spring 2019, Barker joined Danone, where he leads a diverse portfolio of dairy and plant-based brands. Barker sat down the CSNC contributor Talbot Boggs to discuss Canadians’ evolving consumption habits, the desire for healthier options and how manufacturers are working with the convenience industry to help meet those needs.

like to call ‘cleaner’ labelling—labels which clearly highlight better-foryou content and ingredients. They want tasty and nutritious foods with protein, fibre, folate, antioxidants, phytochemicals (naturally occurring compounds), unsaturated fats and low in or free of added sugar. Yogurt is a superfood packed with protein and nutrients, such as calcium, vitamin B, potassium and magnesium that also is low in fat. When looking at sugar content, consumers need to make an important distinction between sugar that is added and sugar that occurs naturally from lactose in milk and fructose in fruit.

CSNC: What are consumers looking for today in their primary and convenience food and beverage options? BARKER: Increasingly Canadians

CSNC: How are companies like Danone responding? BARKER: To try and meet

want to adopt healthier lifestyles. This desire is leading to a growing popularity of protein and plantbased food and dairy products. Recent statistics from Nielsen, for example, show that more than 40% of Canadian consumers now are incorporating these food types into their daily diets, which also includes their grab-and-go and snack food and beverage options. The trend was recently given a major boost in this country when these food and beverage options were included in the new Canada Food Guide as being an important component of a healthy diet.

CSNC: Specifically, what are consumers demanding? BARKER: Consumers are developing an increasing appetite for products with no or reduced sugar and artificial flavourings, more natural ingredients, and what we

CCentral.ca

consumer demand for healthier products, Danone introduced a naturally flavoured yogurt with no sugar or artificial flavourings at the beginning of 2019. It was the boldest step yet that any manufacturer has taken to achieve the benchmark of healthy, natural food options that consumers are demanding. So far it has been doing very well.

CSNC: As a category, yogurt consumption has fluctuated in the past. What can manufacturers do to ensure this category stays relevant and consistent with consumers in the future? BARKER: Consumer demands for healthier food and beverages in varying formats and sizes are directing manufacturers to satisfy all customer segments and retail venues. We continue to grow because our products draw on the company’s longstanding consumer driven innovation and use of the best ingredients. ◗

CSNC: What

about the convenience and gas channel? How are manufacturers helping stores carry and sell these better-foryou alternatives? BARKER: In the C&G channel there is a movement among retailers to evolve their product assortment to better-for-you options. We hope to be a leader in that space and work with our valued partners to introduce the right products for their business to make sure that they maintain a proper balance for their customers. There are many things we can do to help retailers drive awareness of their healthier product offerings through multibuy and combo offers with other categories. We are committed to support our retail partners as they evolve their better-foryou offerings.

This interview is edited for clarity and length.

JANUARY/FEBRUARY 2020

| 29

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INSIDE Malfara brothers join forces with new-to-Canada fuel brand Inver to enhance the business equation at their three Ontario locations JANUARY/FEBRUARY 2020

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JANUARY/ FEBRUARY 2020 Volume 25 | Number 1

Innovati n

CONTENTS

at the pumps

ADVERTISERS

8 Aerodry Systems, LLC .............................. 21 AIR-serv Canada Inc. ............................... 24 Blendco Systems ....................................... 14 Canature WaterGroup Canada Inc...........22 Coinless..................................................... 15 Dover Fueling Solutions ............................ 18 Eurovac ..................................................... 15 Gallop Brush Company ............................. 12 Greenergy Fuels Canada Inc ..................5, 7 Mondo Products Co. Ltd. .......................... 2 Mighty Flame Canada .............................. 16 Pumps & Pressure Inc. .............................. 14 Tank Traders.............................................. 14 Unitec ......................................................... 9 WashLinks ................................................. 17

CCentral.ca

Editor’s Message Fuel cell power play?

Q&A The view from CIPMA

Restrooms Perform What does your restroom say about your operation?

A change for the better New fuel brand motivates Ontario service station group

COVER STORY Innovation at the pumps

Better gas, happy customers What’s in your tank?

Trends to watch Five innovations will change car wash in Canada

Product News

CCA Industry Forum Leadership worth following in car washing

STAY CURRENT DON’T MISS OUR E-NEWSLETTERS! Car wash, petroleum, and convenience news & insights, delivered twice weekly. Sign up today at www.CCentral.ca

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EDITOR’S MESSAGE

20 Eglinton Ave. West, Suite 1800, Toronto, ON M4R 1K8 (416) 256-9908 | (877) 687-7321 | Fax (888) 889-9522 www.CCentral.ca GROUP BRAND DIRECTOR - CONVENIENCE Kathryn Swan | kswan@ensembleiq.com EDITORIAL EDITOR, CSNC Michelle Warren | mwarren@ensembleiq.com EDITOR, OCTANE Kelly Gray | kgray@ensembleiq.com TRANSLATION | Danielle Hart ADVERTISING SALES NATIONAL ACCOUNT MANAGER Elijah Hoffman | ehoffman@ensembleiq.com SALES & EVENTS COORDINATOR Claudia Castro DESIGN AND PRODUCTION VICE PRESIDENT, PRODUCTION Derek Estey | destey@ensembleiq.com DIRECTOR OF PRODUCTION Michael Kimpton | mkimpton@ensembleiq.com ART DIRECTOR | Linda Rapini DIRECTOR OF MARKETING Alexandra Voulu | avoulu@ensembleiq.com SENIOR DIRECTOR AUDIENCE STRATEGY Lina Trunina | ltrunina@ensembleiq.com WEB OPERATIONS MANAGER Valerie White | vwhite@ensembleiq.com CORPORATE OFFICERS CHIEF EXECUTIVE OFFICER | Jennifer Litterick CHIEF FINANCIAL OFFICER | Jane Volland

CHIEF INNOVATION OFFICER | Tanner Van Dusen CHIEF HUMAN RESOURCES OFFICER | Ann Jadown EXECUTIVE VICE PRESIDENT, EVENTS & CONFERENCES Ed Several

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Fuel cell power play? What happened to the promise of hydrogen cars? Ten years ago, all the talk was about this technology that was set to provide an environmentally responsible solution to the gasoline combustion engine. Currently, electric vehicles (EV) have outpaced fuel cell (FC) technology to become the dominant force in alternatives to gasoline and diesel power. Provinces, such as Quebec, B.C. and Ontario, have bought into battery-powered vehicles in a big way with infrastructure to allow motorists to recharge at thousands of roadside sites that have helped to assuage driver concerns about poor EV range. Early on, fuel cell technology, such as hydrogen, had a lot of push with companies such as Ballard Power Systems making a strong case for the technology. There is little doubt that FC has the capability to drive change and this technology is more environmentally sensitive than EV, which requires massive batteries to perform. These batteries are a nuisance to dispose of, they require hard-to-obtain minerals and they pose a significant hazard to emergency personnel at accident sites because electrocution is a possibility. Critics of FC suggest motorists would be driving mini-Hindenburgs that would be prone to an explosion in an accident. This was the same argument against gasoline that had jurisdictions, such as B.C.’s Lower Mainland and part of the U.S. mandating full-service pumps where attendants could safely fuel cars. Hydrogen is also more expensive than gasoline at around $1.80 to $2.00 a litre. In the end, the biggest argument against FC is the availability of models, delivery times on purchases and the

cost to motorists—vehicles, such as Hyundai’s Nexo, can run $75,000 or more. Hyundai plans to make Nexo its FC flagship in a lineup that will see the carmaker introduce 18 models by 2025. Shell opened the first hydrogen filling station in Canada in Vancouver last year and has plans for more sites as car manufacturers ramp production of hydrogen vehicles. The beauty of the hydrogen model is the ease of fuelling (about three minutes) and the range that can reach 500 kilometres on a tank (even in the winter), about the same as a gasoline engine. As well, and perhaps most important, is the fact that hydrogen FC cars’ only emission is simple water that comes out the tailpipe. Alongside Shell, a major convenience retailer in the gas business has mentioned to OCTANE that they plan to start building hydrogen filling centres in B.C.’s Lower Mainland later this year to meet demand as more people get on board. Certainly, we are looking at a chicken and egg scenario where consumers will only buy a car if the infrastructure supports it. Fuel dealers should be prepared for this change as motorists look for alternatives to the challenges of EV.

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JANUARY/FEBRUARY 2020

Q&A WITH JENNIFER STEWART

The view from CIPMA Last month we set up a Q&A to ask CIPMA president and CEO Jennifer Stewart about her views on the forces impacting change and driving innovation in the downstream side of Canada’s petroleum industry. These are her insights.

OCTANE: What do you see as the leading factors in change in today’s fueling sector?

Stewart: An Aging Workforce: The aging need to adapt recruitment efforts and think outside the box to attract a new generation of skilled and passionate talent to work in the sector. The availability of the employees in the trucking sector is also a significant concern for the sector. There’s significant turnover in the sector, and driver shortages are a problem many of our members struggle with on a regular basis. Perception: The oil and gas industry in Canada has long suffered from a perception problem. The younger generation seems to shun the industry in favour of work in ‘cleaner’ industrial areas such as IT and cleantech. This is starting to change though, as many businesses are stemming out from their traditional practices and exploring ways to integrate clean technology and digital innovation into their operations. Consumer Interaction: The increase in technological innovation is changing the way businesses interact with consumers across all industries, and the petroleum marketing industry is no exception. Mobile fuel delivery, digital loyalty programs, and apps that steer consumers to the nearest station with the cheapest gas prices are disrupting the status quo and challenging businesses to get creative to be successful.

JANUARY/FEBRUARY 2020

OCTANE: What pros and cons do you see in the technology shift?

Stewart: Convenience is a major factor in successful customer service, and in many cases enhanced customer service and technology go hand in hand. Technology enables information and services to be shared with consumers in real-time, or when and where they want it. Technology also provides businesses with a wealth of data that can be analyzed to optimize business practices, keeping an edge on competition. The downside to technology is it can come with a steep learning curve, and a hefty upfront price tag. There is also, of course, the worry that it will replace people’s jobs. While these are real concerns, with proper implementation, I generally see technology providing more good than evil, and supporting jobs to allow businesses to expand into new operational realms, rather than replacing workers altogether.

goal of making the sector more green. We are also seeing a regulatory push for the adoption of other clean fuels and electric charging capabilities. In the face of such a regulatory environment, one thing is clear: we need to continue to advocate for our sector, and promote the innovations of our industry. OCTANE

Many businesses are stemming out from their traditional practices and exploring ways to integrate clean technology and digital innovation into their operations.

OCTANE: How is the regulatory environment evolving and where is change necessary? Stewart: Governments have a regulatory focus on the sector and industry, and that isn’t going to change anytime soon. We are seeing increased renewable fuel mandates at the provincial level, carbon pricing, the Clean Fuel Standard and other grants and funding programs with the

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Sweet Market Esso

Restrooms perform By Kelly Gray When it comes to service station satisfaction, restrooms have been a source of customer appreciation since the invention of the automobile. In 2016, the Whitecourt Esso Superstation won Cintas Canada's Best Restroom Award and helped to showcase the power of a great gas station restroom. The Alberta-based site is located on Highway 43 between Edmonton and Grande Prairie, on a route popular with tourists heading to Alaska. "We can have as many as 1,500 customers a day pass through here and many people comment on how surprised they are by the quality of the bathrooms," says Whitecourt ESSO general manager Shelby Rondeau. She says the extra effort in decor made by site owners, the Hommy family, has paid offâ&#x20AC;&#x201D;the biggest benefit being returning trade. Shelby reports that they receive constant comments on the quality of the site. "We have a lot of customers who are driving through from places like Texas. The marble and the chandeliers in the women's

JANUARY/FEBRUARY 2020

restroom have earned a lot of positive attention from these folks, of whom many have told us they look to the Whitecourt Superstation as a stopping place each year on their holiday drive. They see other facilities on the way and their comments tell us they see us as the best in bathrooms." The Whitecourt Esso opened in 2015. The site offers eight gas and two diesel dispensers under the canopy, as well as a substantial foodservice component that relies on a scratch kitchen. The manager tells OCTANE that they have staff perform a 45-minute deep clean twice a day and inspect the three bathrooms, which measure about 10-ft. by 15-ft., every hour. In Red Deer, Alta. the ESSO Sweet Market is another example of how operators can use restroom facilities to create a positive guest experience. This station, located in Red Deer's Gasoline Alley, is also operated by the Hommy family and opened in December 2018. According to Sweet Market manager Tim Anderson, the owners are serious about bathrooms. "The family has travelled a lot and they saw how important clean, comfortable and well-decorated facilities can be. I'd say they did this for their moms, who saw lots of restroom horrors when they were travelling."

What does your restroom say about your operation?

Anderson says customers respect a well-tended bathroom. "When the facilities are clean and maintained people don't throw things on the floor or leave a mess. They treat it like home." Inside the Sweet Market site, they offer both paper towels and air hand dryers to provide a choice for guests. Decor includes fully tiled walls and floors, hand-carved doors, chandelier lighting and even smart glass doors that frost over for privacy when in use. Facilities are deep cleaned every 12 hours and checked routinely during the day to make sure everything is in tip-top condition. Pilot Flying J is spending more than $100 million to enhance the bathroom experience for its customer base at some 650 locations throughout the U.S. and Canada. Improvements include, new Italian tile, state-of-the-art LED lighting, low water consumption toilets and eco-friendly dryers, as well as extra thick towels. According to Pilot Flying J spokesperson Stephanie Myers, the company strives to make the restroom and shower experience as comfortable as possible. "Our new locations include clean, bright restrooms and spacious, private shower rooms with premium towels and quality shower heads with body wash dispensers. This year, as part of our effort to enhance the restroom and shower experience for our guests, we plan to upgrade our shower facilities and bathrooms at two locations in Canada, including Winnipeg-Brookside and Kapuskasing, Ont.," she says, adding that drivers can save time waiting for a freshly cleaned shower by reserving their shower with the Pilot Flying J app. OCTANE CCentral.ca

FIVE TIPS FOR BATHROOM BLISS

Flying J

Listen to your customers. Don't assume guests are just being picky. If they have concerns about your facilities, they will tell others.

Schedule a regular cleaning and charge specific staffers with the task. Make people responsible for the cleaning duty and give them the tools to make it great. Post the schedule where guests can see it.

3 4

Use eco-friendly cleaners and let customers know you are doing this. High-style decor is fantastic, but clean, comfortable and common sense approaches are steady winners for customer approval.

Install electronic alerts that let staff behind the counter know there is a guest in the bathroom. This is good for basic security.

Whitecourt Esso

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A CHANGE FOR THE BETTER

New fuel brand motivates Ontario service station group

PHOTOS Brian Pieters

The Malfara family came to Canada from Italy in the 1950s to start a new life in the Toronto area. Today, car repair and fuel customers in southern Ontario are glad they did. The Malfara brothers, Joe and Vito, individually operate three locations—Burlington, Etobicoke and Toronto—under the new-toCanada Inver banner and have earned reputations as trusted mechanics and value-oriented fuel dealers.

JANUARY/FEBRUARY 2020

By Kelly Gray

Vito Malfara, a retired educator and school principal, who now operates a fuel and automotive repair site in Burlington and coowns another location on Rogers Road in Toronto, tells OCTANE that it was older brother Frank that got the family going on service stations. “He had stayed behind in Italy to finish his mechanics’ apprenticeship before joining the family here in Canada. After working for others in the Toronto area, he leased his own Texaco station in the early 1960s,” says Vito, adding that the promise of a better location a few years later brought his father (also Frank) into the business. The family established a partnership agreement and went to work. “My brother was behind the auto repair, while my father was the person behind the customer service. My father Frank had little English and he didn’t even have a drivers’ licence, but he understood respect and the value of treating people fairly and delivering on the service promise. He taught us well and, while he is no longer alive, we take his attitude and attention to detail forward with businesses that still carry his name.” Over more than 50 years the Malfaras have had experience with fuel suppliers, including Texaco, Fina, XTR, Econo Petroleum, OCLA, Global, Cango and Esso, as well as others. “We’ve dealt with a lot of companies as dealers and often found the relationships challenging,” says Vito remembering how suppliers would often be great to deal with the first year of an agreement and then start nickel and diming them and having trouble with deliveries. “This is why we decided to go with Inver, a new retail fuel brand just introduced to Canada. We researched and saw how popular the brand was in Ireland and we discovered it was run by Greenergy, a Brookfield company (Greenergy was purchased by Toronto-based Brookfield Business Partners in 2017). Greenergy has three decades of experience and success in the retail fuel supply industry. This gave us confidence the brand would be supported,” says Vito, mentioning that it was one of his customers who provided the contact with the company. “Greenergy was looking for dealers in Ontario and the fact we have three sites made a great fit.” Full automotive service is offered at the Malfara’s three locations, which include Malfara Automotive at 500 Browns Line in Etobicoke, Frank Malfara Service Centre at 165 Rogers Road in Toronto and Frank Malfara Service Centre at 4032 New Street. Burlington. This includes tires, oil changes, rust proofing CCentral.ca

Service sells

and general mechanical. They also offer Inver branded diesel and three ranges of gasoline. “We were tired of our suppliers not meeting delivery deadlines. Gasoline is very competitive. If you cannot provide the product, customers will go across the street and you have to fight to win them back. We saw that Inver was supplied from a growing number of rail-to-road terminals strategically placed around Ontario. To us, this meant greater dependability. They were also able to offer us a better rack rate that included transport. This was more competitive than the others we had been dealing with. Even more, Inver and Greenergy were willing to make investCCentral.ca

ments in the forecourt with dispensers and computerized price-setting systems,” says Vito, adding they were pleased to discover that Greenergy staff would pick up the phone when he called with a question. “Our experience with other suppliers was that you were often on your own. It could take days and days to get a return call on an issue or challenge at the pumps.” Inver is currently present in Ontario at five locations under banner and its gasoline products, supplied by Greenergy, are getting traction with independents looking for a change. Sites include Burlington. Etobicoke, Toronto and Thunder Bay, where two new operations have just opened.

All the Malfara brothers’ sites are fullserve operations. Indeed, a customer who time travelled from 1968 would see little difference in the attendant service. Customers pull in and are often greeted by name. Attendants fill the tank, check the tires and oil and wipe down all the windows. Little mechanical issues, such as a burned-out tail-light or a stuck door latch, can be handled quickly with customers often not having to leave the car. Vito reports that their forecourt attendants, three in Burlington, four in Toronto and two in Etobicoke, use mobile credit and debit card readers to further the convenience. “When we tried to institute the use of mobile card readers we had a challenge from our fuel supplier at the time. They (Econo Petroleum) told us they did not think it was safe and would not permit us to use them. We could see that the trade literature was saying that myth had already been discounted as fiction and we decided to go with better customer service and the mobile readers. We also saw this as a move by our supplier to limit our ability to meet customer demands. We don’t sell candy or chips or lottery tickets. We just sell automotive service and we work to do that at a very high level. Gas is what gets people onto the site, but it’s our commitment to customers and the quality of our repairs that keep them coming back,” he says, adding that they don’t charge for service and their Inver gasoline is often 0.1cent cheaper than the nearby ‘low price’ Pioneer station. “It’s the repair business that pays the bills,” says Vito mentioning that their oil changes ($10 cheaper than Mr. Lube) are their number one service followed by brakes and then tires. “In this business, customers often come in unhappy. Their cars are broken. We want them to leave in a good mood and this is our mission every day. Having the right suppliers, as well as energetic well-intentioned staff, and convenient locations, are all part of what we see as a winning business equation.” OCTANE JANUARY/FEBRUARY 2020

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Innovati n MANUFACTURERS UP THE ANTE WITH NEW TECH By Kelly Gray

Fuel dispensers and related equipment have come a long way since 1907 when Canadaâ&#x20AC;&#x2122;s first retail gas site opened to the public in Vancouver at Cambie and Smithe. Back then it was considered a win just getting fuel safely from the storage tanks to the car. Today, dispensers are still an interface between customers and the retailer, but they also perform a range of new tasks and have capabilities designed to enhance the forecourt experience.

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at the pumps A good case in point of leading-edge dispenser technology is Wayne Fueling Systemsâ&#x20AC;&#x2122; Ovation 2 series. Using a large dispenser mounted video screen with customer interface, Ovation 2 drives targeted product messaging with dedicated media that translates into c-store sales. Wayne reports that an enhanced mediaat-pump experience creates a 16% lift in traffic from the forecourt to c-store and a 3% to 5% hike in sales. Devices are flexible in capability, with media messaging changing through the day-parts. This means morning customers are offered coffee and breakfast sandwiches, while afternoon customers might like the two-for-one energy drink promo. Specials for car wash, wiper blades and wiper fluid are constant through the day. Ovation 2 also has 25% more space for branding and other messages dedicated to driving secondary sales. Media dispensers are a proven tool that increases c-store sales. For example, Nielsen-Lieberman Research found Pepsi sales increased 20% and candy purchases were up by 69% following the installation of dispenser media displays.

JANUARY/FEBRUARY 2020

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Wayne is a division of Dover Fueling Solutions, a company with a range of brands that offer unique and innovative products for the forecourt. For example, its Tokheim division offers its T-Media dispenser, a product popular in EU countries. T-Media features a 17-inch display monitor, the largest that we have seen. Like Ovation 2, media is targeted to the motorist and offers day-part messaging, as well as lots of interactivity and ease of programming. Not to be outdone, Gilbarco Veeder Root has brought Encore Experience to the market in the U.S. This system offers a cloud-based open applications platform that enables retailers to customize on-screen experiences. This creates excitement at the forecourt and drives customers to convenience store purchases. Retailers can create unique apps, use Gilbarco-built platforms or go with a third-party-developed app to deploy content and functionality to Encore dispensers’ 10.4-inch display screens.

Like other media dispenser systems, Encore drives loyalty, creates repeat business and adds to in-store sales. Simply, motorists are captive for the few minutes they fill their tanks. The dispenser creates engagement that shows off content and products. Here, retailers can customize existing digital apps with graphics, such as backgrounds, icons and logos. On board are existing applications that allow for games, ticker information, survey and coupons. Customers can even order c-store items at the dispenser and pay at the same time they purchase gas. Bennett Pump has been making fuelling devices for more than a century and many Canadian operations utilize the company’s new NV line of dispensers. These products offer an enhanced

operating economy with the company suggesting energy costs are 60% lower than other dispensers. It also offers one of the best fuel metres in the business, something operators like because accuracy puts money in their pockets. The systems also come with a range of media displays that range from 7-inches to 10.5-inches.

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Robotic fuelling making gains Business researchers MarketsandMarkets project the robotic refuelling system market is expected to grow from (U.S.)$25 million in 2019 to (U.S.)$2.2 billion by 2030. Driving this growth is the lowering cost of robotics at the forecourt, as well as enhanced safety and security at the site. Challenges include the replacement of manual gas caps with automated fuel caps. Already some car manufacturers, such as Ford and Chrysler, have gone this route. Stockholm-based Fuelmatics is an industry leader in robotic fuelling. Since their market introduction about 10

ONE APP TO RULE THEM ALL

years ago the company has seen gains in use from sectors such as mining, long haul trucking, urban transport and other large-scale fuel users. Last year they inked their first U.S. deal for the Fuelmatics 5000 with Airport Plazas, a multi-service retailer that offers gas, diesel, CNG and E85 at nine airports in the U.S. such as JFK, La Guardia and Newark airports. The Fuelmatics 5000 has smartphone payment capability, compact design, and an operating speed that can fill tanks in about three minutes. The system can handle all liquid and gas fuels, so it is ready for hydrogen stations as they are built.

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Sell the Sizzzle.

Fuelmatics’ device works by establishing a sealed connection with the car before it opens any flow valves. Vehicles approach the unit, drivers activate it with their mobile device where their credit card info is stored. A robotic arm opens the gas hatch on the car and makes a seal with the nozzle. As an added blessing the system recovers 100% of the vapour and condenses it back to fuel.

Nozzle technology keeps pace with trends

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The nozzle is the direct interface with the customer. If nozzles spray fuel, leak or have an unwieldy handle grip, operators can run into unhappy customers. Manufacturers have been hard at work to make the nozzles and handles both ergonomic and efficient. One instance of this innovation comes from Husky, a 70-year old company that has recently introduced the EZ Lever nozzle. Husky is represented in Canada by Red Leonard and Associates. Here, sales manager Jim Rodd tells OCTANE that the EZ Lever is attractive to people with disabilities, such as arthritis. “The nozzle operates more smoothly and customers have more control over how much fuel they dispense,” he says noting that the EZ Lever is a two-piece design that allows the poppet to open with just five pounds of force. Most nozzles on the market ask customers to use 10 pounds of force or more to get dispensers moving gas to vehicles. Husky has also introduced the XS nozzle. Rodd reports this device has shut-off features to enhance safety. For example, the nozzle will not activate if the pump is not on or the car’s gas tank is full or the leak detector has not fully cycled. The nozzle also sports a stainless steel spout bushing that prevents sensor tip damage. If the nozzle is dropped or is raised above horizontal, Husky’s Flo-Stop device shuts the nozzle down. An important introduction here is StreamShaper, a technology that works to reduce turbulence in fuel flow that results in less splashback. Pants and dress shoes have never been happier. Gilbarco Veeder-Root is another prominent manufacturer that is making it less difficult to fuel vehicles. This company has come forward with Ergo, a dispenser nozzle that is designed for easier one-handed operation. The company reports that Ergo offers a lever that is 66%

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Manufacturers have been hard at work to make the nozzles and handles both ergonomic and efficient.

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easier to pull than their previous model. The nozzle is also 12% lighter and uses heat-treated roller pins at the drive shaft assembly to better resist the elements and hold up to heavy use. The Ergo also handles the action in extreme environments with performance rated for temperatures from minus 40ºC to 51.6ºC.

Storage tank improvements OPW is a major name in fuel storage and they have been staying up-front thanks to regular developments. For example, they recently released the High-Flow Loop System. This Available only through equipment is an extension of Blendco Systems 800.446.2091 OPW’s FlexWorks Loop System. blendco.com The company suggests the new systems are ideal for truck stops where there can be multiple lanes for transports and blended service for passenger cars and Super Clear Ad NEW 3.56 x 4.81.indd 1 11/13/2019 light trucks. “High-volume sites were a challenge with the offset product inlet configurations on high-speed dispensers, as well as a way to incorporate our larger diameter 3-inch flex pipe,” says Ed Kammerer, director of marketing and global product strategy for OPW Retail Fueling. “Essentially, the High-Flow Loop System takes the components of the original and ‘supersizes’ them so they can deliver higher flow rates—all while maintaining the original system’s streamlined installation, operation, monitoring, maintenance, repair and replacement capabilities.” For fuel providers with compromised single wall storage tanks, ZCL has a solution. Their Phoenix • Rapid Return On Investment System now offers a less expensive way to deliver con• Complimentary Business tainment when single wall units fail or site challenges • High Volume – Traffic Builder make removal of existing tanks a challenge. The • Highly Profitable - Minimal Labor Sonny’s upgrade system consists of two corrosion-resistant • Training with CarWash College laminates with a proprietary glass fabric between the • Monthly Car Wash Subscriptions Complete Car Wash Solution • Free Demographic Studies laminates to create an interstitial space. The interstice Eight Powerful Solutions. • Business Proformas can be either dry or hydrostatically monitored. The All in One Place. • Complete Site Design & Analysis Learn More Now Phoenix System, when applied onsite by trained www.sonnysdirect.com/onewash installers, is compatible with biofuels, including ethanol-blended fuels and bio-diesels. OCTANE

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GROWN E25 STANDARD Wayne Ovation™ fuel dispenser

w w w. w a y n e . c o m © 2020 Dover Fueling Solutions. All rights reserved. DOVER, the DOVER D Design, DOVER FUELING SOLUTIONS, and other trademarks referenced herein are trademarks of Delaware Capital Formation, Inc./Dover Corporation, Dover Fueling Solutions UK Ltd. and their affiliated entities, registered in the United States and various other countries. 010220v2

BETTER GAS, HAPPY CUSTOMERS What’s in your tank? By Kelly Gray

Over the years, vehicle engines have become far more demanding. Motors are now designed to utilize higher compression ratios, while delivering cleaner emissions and better fuel usage. It wasn’t easy to get to this point, but a partnership between leading car manufacturers and fuel companies has helped make the performance we demand in our cars and trucks a reality. What was created was a format called Top Tier Detergent Gasoline, a fuel formulation designed to preserve an

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engine’s manufacturer mandated performance and emission output. The industry reports that Top Tier came on board in 2004 to take gasoline beyond the minimum standard. Chevron was the first of the majors to take up the gauntlet. Today, consumers can expect nearly a full landscape of Top Tier players, from Petro-Canada to Shell, Federated Co-op and others. Engines that don’t burn Top Tier have greater build-up on intake valves, poor idle and acceleration, knocking or pinging and lower fuel economy. In the U.S., the American Automobile Association (AAA) commissioned a study that showed Top Tier gasoline had 19 times fewer carbon deposits on injectors, intake valves, and in the combustion chamber when compared to regular gasoline.

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AAA also found Top Tier gasoline can have a cleansing effect, reducing intake valve deposits by

45% to 72% when used over a 5,000-mile interval.

AAA also found Top Tier gasoline can have a cleansing effect, reducing intake valve deposits by 45% to 72% when used over a 5,000-mile interval. It should be mentioned that the Canadian General Standards Board (CGSB) mandates that all octane gasoline contain detergents designed to protect against the build-up of engine deposits. These standards are now the minimum, with Top Tier going well beyond the basics. The result is that Top Tier offers a competitive advantage for those retailing these fuels with some of the majors going beyond to establish niche markets of their own. For example, Suncor’s Petro-Canada stations have taken Top Tier further with a fuel enhancement available only at their sites. “Our proprietary additive technology, Tactrol, is designed to keep fuel systems clean which provides improved emissions,” says Suncor spokesperson Nicole Fisher. “Additionally, our Ultra 94 Fuel, which is a 94 octane fuel, helps ensure you get maximum horsepower, acceleration and performance from your vehicle. Ultra 94 is available at over 450 stations in Alberta, Ontario and Quebec,” Fisher reports, adding that, like many refiners, Suncor alters its products for changing weather conditions. “We use a phased approach and change the quality of the diesel on specified dates based on industry agreed-to targets. We start this process late in September and continue the phased changes until late in November/early December. We use a similar phased approach with our gasoline, to ensure the gasoline performs superbly in all seasonal conditions.” At Shell, they offer V-Power Nitro+ Premium gasoline. Like Petro-Canada’s forecourt products, this fuel goes well beyond the minimum standard for detergents with seven times the amount of cleaners in standard gas. Their highest octane level is 91% and every station in Canada offers 0% ethanol. At Esso and Mobil locations they market Synergy branded gas. This product delivers with a seven ingredient for-

JANUARY/FEBRUARY 2020

mulation designed to keep engines clean, running efficiently and meeting manufacturers’ standards. The fuels group reports Synergy gas uses unique solvents, anti-adhesion compounds that improve cold-weather starting, corrosion inhibitors that keep gas tanks rust-free, demulsifiers to keep water out of the mix, and detergents. The formulation also comes with molecular markers that ensure the correct additive amounts are blended at the refinery.

Help for small independent operators For the small independent dealer that is not paying for Top Tier licensing or where the refiner is not supplying this product, it can be a challenge to meet customer demand. Great cars need great fuels and motorists are prepared to pay. Indeed, retailers who offer innovative gasoline and diesel products can charge a premium price at the dispenser—often as much as 20 to 25 cents a litre. As well, there is a vast array of additive products that are available for retailers to merchandise. These include gasoline stabilizers, fuel-line antifreeze, octane boosters, fuel injector cleaners, upper cylinder lubricants, and anti-gelling additives. Leading brands such as Kleen-Flo, Rislone and Lucas Oil offer products that deactivate metals, inhibit corrosion, oxygenate and remove oxidants, as well as enhance octane performance. AMSOIL Diesel Injector Clean + Cetane Boost, which was just launched recently, combines superior lubricity and detergency, along with increased horsepower and cetane (combustion speed of diesel fuel and compression needed for ignition) in one product. It cleans dirty injectors, increases cetane up to eight points, lubricates pumps and injectors to reduce wear and is safe for use in all diesel fuels. The result is restored horsepower and improved fuel economy in diesel applications. At The Convenience U CARWACS Show in March, Total Meter Services, an industry-leading company involved in

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fuelling system design, fluid delivery, measurement, filtration and fabrication, will introduce a new product innovation that allows retailers to inject additives to their storage tanks to create their own blend of premium fuels. According to TMS vice-president sales Kevin Jensen, Top Tier typically goes about 2.5 times the level of additives mandated by the CGSB. “To get the customers from the luxury and specialty car market, fuel companies and prominent retailers saw that they needed to go beyond the standards,” he says, remarking that they were seeing operators resort to barrel and beaker methods to create enhancements. “Operators were finding they had poor mix rates and staff were making mistakes. Our new system communicates with the tanks and automatically atomizes specifically for each site. This means operators know exactly the formula and can offer customer assurance about the fuel product. This is a cloud-based system that features the ability to monitor on an enterprise-wide basis. It also monitors temperatures and can increase or decrease inputs depending on the seasonal need. TMS is having considerable success with this new product and is seeing it placed at a major retailer with hundreds of sites in North America. He notes that this retailer has seen the cost of additives decline dramatically and they are now able to achieve unattended nighttime deliveries with driver time decreased as well. “Independents can buy the least expensive fuels at refiners and then treat them at their locations. Then they can brand the product and charge a premium price. It also enables smaller operators to step up into the luxury and sports car market with grades of fuel that meet higher standards,” he says, concluding that motorists are more knowledgable about their engine needs; especially those with upper-tier automotive products. “Better gas attracts new customers. People are still price conscious and this drives volume, but to go beyond the basic markups and get to a premium price level you have to differentiate yourself with a better product.” OCTANE

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TRENDS TO WATCH Five innovations will change car wash in Canada By Kelly Gray

Canada’s car washes are doing well. According to the most recent Kent Report (OCTANE July 2019), there were 2,034 car washes associated with the country’s 10,153 fuel stations last year. Collectively Canada’s three largest fuel brands—PetroCanada, Shell, Esso—rose to hold 13.2% of the market share with the rest held by independent operators, such as Valet and Classic, Shine and others. The industry reports gains of 4.6%, with continued growth pegged beyond 2% for the coming year. Behind this gain is an increase in disposable income and a climb in the number of cars on Canada’s roads.

As we move into 2020, significant trends exist to help wash and detailing operators to continue moving forward.

1 - Interior cleaning services As cars become more expensive and motorists become more time harried, expect detailing services to become even more commonplace. “With our new detailing system, we can charge about 30% to 40% more per car while getting more referrals and repeat business,” says Skogie’s co-director Chris Skogland, reporting that revenue from their two detailing bays in Kelowna B.C. climbed 25% up to around $250,000 a year. Flex models, such as Mississauga’s Auto Spa in Ontario, where they have three 95-foot STI flat deck conveyors for express interior detail, as well as four fine vehicle detailing bays, have been able to process vehicle interiors far more quickly than traditional full-service washes using assembly line-like procedures.

2 - Changing automotive technology Vehicle technology is moving forward and car washes have to adapt to keep up with trends. For example, electronic parking brakes that are triggered by tire rolling and automatic emergency braking systems that are triggered by incoming objects, such as brushes, are features that create challenges for standard wash facilities. Both of these can automatically engage the vehicle’s brakes in the wash tunnel, causing the car to jump rollers and collide with incoming customer vehicles. Some car manufacturers, like Mercedes, now feature an on-board wash function to disable these new systems. Combatting this challenge is the new range of conveyor systems that carry the vehicle through the wash, rather than pull it through on a chain and pulley system. With conveyors, cars are treated more delicately and operators have more service options to offer customers. CCentral.ca

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3 - Apps

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We provide over 100,000 service visits annually to our customers

Almost 50% of U.S.-based c-stores and fuel providers utilize an app to offer service and deliver marketing messages to customers. This number is expected to grow by 5% a year over the next three years, with expectations the gains will expand even further as technology makes further inroads following 5G roll-out. “The benefits of having a mobile app are huge,” says Mike Black, managing partner with Valet Car Wash, a 10-unit chain based in Ontario. Valet has one of Canada’s best digital portals. Developed in-house, the Valet app tells users the nearest location, types of service available and cost. Promotions and special offers are built in to make the app a good value equation for customers. Credit card data and personal profiles are stored on the app, making it as easy as a one-button selection. Once payment is made, all customers have to do is show up and enter the code (sent to their phone) into the pay terminal to receive a wash. Users earn points when purchasing washes, which can later be redeemed for free services.

4 - Technology enhances customer service

Wireless Monitoring

Auto Spa in Mississauga, Ont. has proven to be a game-changer for the industry with a system that offers eight points of engineering excellence. For example, the facility provides wide-track and low profile conveyor systems. These deliver lots of tire room and clearance for greater protection for wide rims and tires, as well as low profile cars. Auto Spa also stepped up with electronic brush adjustment that ensures precise and careful positioning of the brushes thanks to the continuous measurement of the rotary movement. Electronic brush adjustment also means the system is gentle on paintwork and doesn’t leave any lasting abrasion marks.

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New coloured foams and LED lighting have worked to raise the level of tunnel and wash bay excitement for customers. The upshot is that more excitement at the wash translates into more business. At The Convenience U CARWACS Show in Abbotsford, B.C., attendees toured a variety of sites in the Lower Mainland. The tour showed off 7-Eleven’s new car wash in Surrey that has helped to invigorate the 10-year-old wash location. Customers have been attracted by LED lighting that shines through a full-length window wall. “People drive by and can see there is a party in the wash bay,” said the operator during the tour. The excitement has driven sales to close to 3500 washes a month. OCTANE CCentral.ca

Suppliers, what’s new in your product line? Contact Elijah Hoffman at 647.558.0103 or ehoffman@ensembleiq.com

Product News C-START® FOR CANADA

Unitec’s C-Start® for Canada is an innovative point-ofsale system for the car wash industry. The C-Start was designed to simplify the transaction experience for operators who wish to automate payment processes: the cashless unit accepts credit cards or wash codes. C-Start for Canada is a smart and efficient choice for petroleum operators. Drive growth with Unitec, a leading provider of car wash payment technologies for over 30 years. Contact: Craig Goodwin, 970-314-0018, cgoodwin@startwithunitec.com

ANOTHER HAPPY COINLESS OPERATOR

Coinless has added a second device to its quiver of retro-fit hardware! Our previous 4-channel solution was the answer for all IBAs, and up to 4 Self Serve bays. Our new, singlerelay device makes your set up even more convenient. Now you can reach all those vacuums with no problems. With our constant feature adds to the already-best app in the market, and our robust Owner Portal, Coinless is the tech solution your customers have been waiting for.

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CANATURE WATERGROUPTM 95 MTS The 95 MTS Series softener is ideal for car washes looking for a reliable and efficient conditioning system that can provide up to 308gpm of continuous soft water, 24 hours a day. The 95 MTS uses 40-50% less salt and regeneration water than conventional systems by bringing tanks on-line as flow rates increase and going off-line as they decrease. Toll-Free: 1-877-288-9888 Website: canaturewg-cied.com/95mts

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JANUARY/FEBRUARY 2020

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CANADIAN CANADIAN CANADIAN CANADIAN

CARWASH CARWASH CARWASH CARWASH ASSOCIATION ASSOCIATION ASSOCIATION ASSOCIATION

WASH WASH VOLUME VOLUME REPORT: REPORT: Q3Q3 RESULTS RESULTS

DIRECTORS Christopher Armena – Morgan Arnelien –

MARK VII

The Canadian Carwash Association has released the 2019 third quarter results of the Wash Volume Report (WVR). Average revenue per site was up by 9.46% at $57,275 compared to $52,323 in the third quarter of 2018. The average cycles per site were up by 12.37% at $ 6,379 compared to $5,677 for the third quarter in the previous year. The average revenue per cycle was down 2.6 % at $8.98.

ENERGY PRODUCTS, FEDERATED

CO-OPERATIVES LIMITED MONDO PRODUCTS CO LTD

CAR WASH FOR PETRO-CANADA

Sameer Haidari –

Undertaken for the CCA by Kent Group Ltd., a research firm specializing in the gas station and car wash industry, the WVR is a national quarterly survey of carwash sites across Canada. Members of the CCA may participate in the WVR program and receive results specific to their region at no additional cost.

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CENTRAL CANADA division BAYVIEW CAR WASH LTD. CLEANING SYSTEMS INC.

Terry McGowan –

7-ELEVEN CANADA, INC. VALET CAR WASH

Tim Walker –

CANADIAN AVERAGE REVENUE PER SITE

REVINMEDIA

Rudy van Woerkom – BIG CITY AUTO N TRUCK WASH

$52,409

Event Coordinators Jaime Richards Martha Feenstra

$60,037

Accountant Ricky Nason

$56,787

$76,660

Kristen Lépine Dos Santos, CAE

$72,958

NATIONAL OFFICE Director of Operations

$57,275

Karen Smith –

$68,695

Jamie Shaw –

Available online is information on how you can add your carwash site to the WVR at: http://www.canadiancarwash.ca/washvolumereport

MOSAIC

$83,103

Sean McBride –

$64,581

Jason Kaye –

$52,323

–

$68,621

Mitchell Easton –

CROSSTOWN CAR WASHES

$90,475

Jeff Beam –

Domenic DiMonte –

JANUARY/FEBRUARY 2020

Canadian Carwash Association Please note our new address: 411 Richmond Street East, Suite 200 Toronto, Ontario M5A3S5

FIND A

CARWASH 9 20 1 Q3

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20 Q3

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on the CCA website has close to a thousand member sites on it. Is your carwash listed? Member sites are listed for free, contact office@canadiancarwash.ca for more information.

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› THE CARWASH SEARCH FEATURE ‹

canadiancarwash.ca/search http://canadiancarwash.ca/search

INDUSTRY INDUSTRY FORUM FORUM INDUSTRY INDUSTRY FORUM FORUM DEDICATED TO SHARING KNOWLEDGE AND BEST PRACTICES IN THE CARWASH INDUSTRY

LEADERSHIP WORTH FOLLOWING IN CAR WASHING

In October 2019, I spoke at the CARWACS show in Abbotsford, BC for the Canadian Carwash Association. I left there with the impression that the car wash industry in Canada held the same opportunities as in the States. These opportunities, however, require a unique perspective. One must step outside of the ordinary grind and pressure of results to find a plethora of human development opportunities. It reminds me of a quote from a friend and amazing speaker on Purposeful Discovery, Zach Mercurio: “The most

extraordinary people are the ones with ordinary jobs and extraordinary perspective”. The Leadership Worth Following Conference travels extensively, to address the needs of operators looking to be the difference in an industry that is incredibly untapped for development, contribution and allure. I often point out, profitability for business is like air for breathing; you need it to stay alive. A business built on the focus of profitability, however, is finite. A business focused on contribution (inputs) that drives the outputs (results/profitability), will last for generations. Fundamentally, human desires have not wavered over thousands of years and when you unlock the potential to serve others’ needs, they will inevitably serve the needs of your business. To learn more and get closer to the LWF initiative, search for us on Facebook at,

“Leadership Worth Following #LWF”. I am eager to connect with you all and dive deep into what makes the car wash industry so incredible! Humbly, Justin Salisbury Breeze Thru Car Wash- COO Leadership Worth FollowingFounder

THE CANADIAN CARWASH ASSOCIATION LAUNCHES NEW WEBSITE AND BRAND REFRESH For the last half of 2019, the CCA was working on refreshing the association's branding and website. We are excited to launch a fresh new look without straying too far from its original message. The goal of the new website is to not only bring a more modern look, but create a better user experience; by providing a knowledge hub of industry information for current and prospective operators, better navigation and displaying information in a more intuitive way. In February, the CCA will be hosting a ‘Website Walk Through’ as a recorded webinar. Visit the new website at canadiancarwash.ca for more information. If you have any questions about becoming a member, contact the CCA National Office at office@canadiancarwash.ca.

CANADIAN CANADIAN CARWASH CARWASH ASSOCIATION ASSOCIATION CANADIAN CANADIAN CARWASH CARWASH ASSOCIATION ASSOCIATION